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Doubt raised over UK ETF stamp duty axe
05 December 2013
Removing the stamp duty on ETFs will not have a big impact on the industry, according to SCM Private’s Alan Miller
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
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 [the UK Government] 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."