The Association of Investment Companies (AIC) has called for the abolition of the stamp duty reserve tax on investment companies, arguing that it perpetuates an uneven playing field between investment companies and open-ended funds.
The AIC has recommended that shares in investment trusts, UK Reits, and VCTs be exempt from the 0.5% tax, arguing that would support growth in the investment company sector.
In turn, this would boost investment in infrastructure, renewable energy, and other less liquid assets that are important for sustainable economic growth.
AIC CEO Richard Stone (pictured) said: “The UK’s investment company sector is the most successful in the world, having surpassed its US counterpart. However, it is being held back from making an even bigger contribution because purchases of investment company shares are subject to stamp duty. This tax is not levied on competing open-ended funds, which gain an unfair advantage.
“The current approach taxes investors twice, as the investment company itself pays stamp duty when it purchases UK shares. This double dipping is normally avoided by policymakers and should be in this case.
“If the government is serious about promoting the UK’s financial sector and supporting its public stock markets, then ending this unfairness should be a priority.”
