On October 9, the UK Chancellor of the Exchequer, Alistair Darling, announced changes to the Investment Management Exemption (IME) in his Pre-Budget Report to the House of Commons. These changes complement the HM Revenue & Customs’ revised Statement of Practice on the IME published in July 2007, as described in the July 27, 2007 edition of Corporate and Financial Weekly Digest. They are seen as a helpful simplification of the IME regime.

The changes include: (i) broadly aligning the list of transactions to those transactions and activities that are regulated by the FSA in order to clarify the scope of “investment transactions”; and (ii) providing for a more proportionate tax effect on non-qualifying transactions, and will be enacted in the Finance Bill 2008.