The UK Government has exempted offshore investors from paying tax on platform rebates, even though they were taxable following an HMRC ruling as recently as March 2013.
The reversal of tax charges comes as the Treasury economic secretary, Sajid Javid, has said in a written ministerial statement that taxing offshore investors could "affect the UK’s competitiveness".
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Offshore investors do not normally pay tax on interest or equity positions and rebates are similar to distribution payments, Javid said, adding that this difference could "have a profoundly negative impact on the international competitiveness on the UK funds industry".
The UK Government has now launched a four week consultation to set out detailed new rules.
"The Government is determined to improve the UK’s competitive position as a centre for investment management," said Javed.
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