Removal of capital gains tax burden makes the switch cleaner

Stuart Welch, CEO, TD Direct Investing welcomes new HMRC legislation that removes capital gains tax burden from investors switching to clean funds: "The passing of amendments to HM Revenue & Customs (HMRC) legislation last week, means that investors wishing to move from bundled share classes to rebate-free or ‘clean' share classes will be able to do so without incurring capital gains tax (CGT) at the time of switching.
 
"Under the old rules, depending on how a fund was constructed, investors were liable for CGT when they switched share classes. Not only does this new legislation remove that liability, it simplifies things for investors. HMRC are clearly trying to make switching to clean share classes easier, which is welcome news, particularly given people were recently hit by the announcement that rebates on trail bearing funds would be subject to income tax.
 
"TD has led the way in making clean funds available to DIY investors and in calling on other providers to follow suit, before any requirement to do so by the FCA. The reality is clean funds are better for investors and we are pleased that moves like this make it easier for them to switch to clean share classes.
 
"We already have 1500 clean funds on our platform and we continue to urge fund managers to make more available.  Once we are certain our clients can access the most popular funds in clean form it is our intention to stop selling trail bearing funds in the near future."