In response to representations from industry, the Government has decided to defer the proposed 6 April 2007 start date of the facility to enable non-taxpaying UK investors to receive interest from Authorised Investment Funds gross.
As part of the consultative process, it has become clear that there are a number of administrative issues which are still to be resolved. Further discussions between HMRC and industry will now take place before the Government confirms the next steps in the process.
SI 2006/964 – (The Authorised Investment Funds (Tax) Regulations 2006) extended the existing facility for gross payments of interest distributions to certain recipients with no liability to tax to add a new category – UK residents with no net tax liability.
In recent months it has become clear that problems are likely to arise in cases where investments are held through fund supermarkets or other types of indirect arrangements. In exploring this with industry representatives it has also recently become clear that there may be wider difficulties for industry in implementing systems to allow payments to be made gross.
Rather than deal piece-meal with each of these areas we want to work with stakeholders to address all the issues around gross payment of interest distributions.
To allow time for further consultation, a Treasury order removing the 6 April 2007 start date for gross payment to UK-resident investors who are not liable to tax will be laid shortly. This will not alter or affect other existing requirements to pay gross to among others, non-residents and managers of ISAs and PEPs.
Please note that the existing arrangements for re-claiming tax continue to apply for the time being. For details, please visit the following page:
