A MAJOR trade body has told Michael Foot, the mandarin running the government’s review of UK tax havens, not to damage the offshore investment trust sector by recommending heavy-handed tax rules.
The Association of Investment Companies (AIC) has said offshore funds contribute over £300m a year to the UK economy and their domiciles should not be hit in any crackdown on illegal tax evasion.
AIC director general Daniel Godfrey said: “Without the offshore sector, the investment company sector as a whole would not have developed in the way it has.”
He added a third of investment trusts whose shares are listed on the stock market are based offshore and the sector’s growth has been almost entirely offshore over the last five years. Overseas funds in areas like Guernsey and the Isle of Man raised £16.5bn compared to £2bn onshore over the period.
Michael Foot’s ongoing tax haven study, announced in last year’s pre-Budget review is under increasing pressure to recommend a crackdown on offshore centres as the Treasury scrambles to boost revenues during the recession.