Bond tax changes will transform investment trusts

Changes to bond taxation could alter the face of the investment trust industry over the next few year...

Changes to bond taxation could alter the face of the investment trust industry over the next few years, according to research group Wins. Trusts holding fixed income currently face severe tax penalties and managers are already considering higher bond weightings in light of the outlined changes. Bond interest is subject to corporation tax in onshore trusts, meaning managers have typically limited holdings in this asset class. The Treasury is now proposing shifting the point of taxation from fund to investor. Wins analysts Simon Elliot said in a low interest rate environment with an ag...