The Investment Management Association (IMA) has proposed radical reform of savings tax which could benefit investors.
Under the proposals, revenue earned by the Treasury from the take-up of investment funds could increase a fraction each year yet cut the amount of administration required by the fund management firm and seem fairer to individuals, as tax would be taken at a single understandable rate.
The IMA points out reform may also be necessary as there are several EU test cases questioning whether or not UK dividend tax is discriminatory.
According to the IMA, the UK is the only other European country aside from Germany where undistributed income is taxed annually rather than when the investor receives the funds from the investment, and Spain is the only other country to tax a fund's income.
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