Clause 16 - Open-ended investment companies
Finance Bill
6:30 pm
Christopher Huhne (Shadow Minister, Treasury; Eastleigh, Liberal Democrat)
There is a problem with both the amendment and the clause, and I should like to give the Economic Secretary an opportunity to address it. The Treasury's long-standing position is that there should be tax neutrality between different investment vehicles. The provisions apply only to OEICs and authorised unit trusts. I mentioned on Second Reading that they do not apply to the main competition to those vehicles, namely closed-end funds or investment trusts. One result will be to widen further the tax advantages enjoyed by OEICs and AUTs compared with ITCs, particularly when investing in bonds. I should like the Economic Secretary to take this opportunity to explain why the Treasury has not addressed that issue in making these changes. Perhaps it is due to the lack of consideration that the hon. Member for Cities of London and Westminster has just described.