The £240 billion investment trust industry is requesting the removal of stamp duty and stamp duty reserve tax (SDRT) on purchases of investment trust, investment company REIT and VCT shares.

The request was made as the Association of Investment Companies (AIC) responded to The UK Treasury’s ‘Review of the UK funds regime: a call for input’.

The AIC represents the interests of the investment trust industry — closed-end funds.

The AIC has 360 members and the industry, much of it based in Scotland, has total assets of approximately £239 billion.

AIC CEO Ian Sayers said: “We have recommended that HM Treasury remove stamp duty and stamp duty reserve tax (SDRT) on purchases of investment trust, investment company REIT and VCT shares.

“This will level the playing field with open-ended funds.

“Since 2014, most purchases of open-ended funds have been exempt from stamp duty yet it remains in place for investment companies.

“There is no policy rationale for this difference as investment companies and open-ended funds serve the same investor need.

“It is time that this distortion is addressed.

“Investment trusts, investment company REITs and VCTs already pay stamp duty, SDRT or stamp duty land tax (SDLT) when they purchase their underlying investments.

“Levying stamp duty again when investors buy their shares leads to double taxation.

“UK policy has traditionally ensured a neutral tax position for the end investor, so that an investor in a collective fund will be in a similar tax position as if they had invested in the fund’s underlying assets directly.

“Removing stamp duty on purchases of investment trusts, investment company REITs and VCTs will create a fair tax position for investors and maximise competition in the public interest.”