The British government is considering an overhaul of their tax code for mutual funds that could put the responsibility for declaring income from funds directly on investors, according to foreign news reports.
The proposal to pass tax charges on interest income from fund managers to investors would be tax-neutral, but would put liability for declaring income on the shoulders of basic-rate taxpayers.
Interest on income is currently taxed at a corporation tax rate of 20% and is paid by the fund manager, while basic-rate taxpayers pay no charge.
The proposal seeks to transfer the tax to individual investors, requiring basic-rate taxpayers to pay 20%.
Experts say few basic-rate taxpayers complete a tax return and fail to declare income from funds. Advisors will be responsible for explaining new regulations to clients.