UK tax system 'puts investors off'

News Article - 11 October 2006
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The tax regime in place in the UK is causing the nation to miss out on being a leading financial centre, research has found.

According to a report written by KPMG for the Investment Management Association, the UK fails to attract more investment funds than countries like Ireland and Luxembourg because of an unfavourable tax system.

Jane McCormick, head of tax at KPMG said: "The growth in fund assets domiciled here has been well behind the competition.

"Between 1995 and 2005, growth in fund assets domiciled in Luxembourg and Ireland has been respectively ten times and twice that of the UK."

Ms McCormick said that most of the respondents whose views formed the report said that they blamed the tax regime for the lack of fund investment interest.

The strength of the financial services sector provides an opportunity for the UK to fill the position of the being the European choice for alternative investments, she added.

Findings follow the earlier claim by KPMG that European middle market businesses research into investment could be susceptible to duplication because of a lack of protection for intellectual property.

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