§ Mr. CarringtonTo ask the Chancellor of the Exchequer what stamp duty treatment he proposes for conversions of authorised unit trusts into open-ended investment companies. [28957]
§ Mrs. Angela KnightIn response to the consultative document which the Treasury published last year with draft regulations to permit the creation of open-ended investment companies—OEICs—the Treasury has received a number of representations that conversions of authorised unit trusts into OEICs should be exempted from stamp duty and stamp duty reserve tax—SDRT—including conversions of two or more trusts into a single OEIC.
When regulations are made to deal with the stamp duty and SDRT treatment of OEICs, I intend to include in them an exemption for conversions of an authorised unit trust into an OEIC or a single sub-fund of an umbrella OEIC. The regulations will also contain an exemption from stamp duty and SDRT, for a period of some two years, for conversions which involve a merger, such as the conversion of two or more authorised unit trusts into a single OEIC or sub-fund, or the merger of an authorised unit trust with an OEIC.
We also intend to introduce legislation in the next Finance Bill to exempt mergers between authorised unit trusts from stamp duty and SDRT if the merger is carried out after the Bill becomes law and within a period of some two years thereafter.
These measures will give unit trust groups a unique opportunity to rationalise their range of authorised unit trusts, and to convert some or all of them into OEICs if they wish. At the same time, the introduction of OEICs will continue to widen the opportunities for share ownership for the investing public.