Doubt raised over UK ETF stamp duty axe

Doubt raised over UK ETF stamp duty axe

The UK Government’s move to axe the stamp duty on exchange traded funds (ETFs) is not expected to have a big impact on the industry.

Chancellor George Osborne announced in his Autumn Statement that stamp duty would be cut on shares purchased by ETFs next year.

Alan Miller, co-founder of SCM Private, said it was a “bizarre move” that was “less than a non-event”.

“I can’t understand it because I’ve never met anyone in the UK who’s ever paid stamp duty on buying and selling an ETF.”

He pointed out that most ETFs are based outside the UK and tend to be based in Dublin or Luxembourg.

“Presumably it is meant to encourage firms to move their domicile to London but there’s no saving for the investor. If the fund companies already have the existing infrastructure, why would they move to London where their income would be subject to UK corporation tax.”

Miller said there are better ways to encourage fund companies to relocate to London.

“If really wants to help the fund management industry the best way to do it would be to ensure the UK fund management industry actually adopted the true and fair code so that every customer could see what they’re paying to bring back trust in the UK which would encourage more people to relocate to the UK.”

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