Plans in last week’s pre-Budget report to allow investment trusts with rental income to be held in Isas will have no effect on the industry, according to the Association of Investment Companies.
As part of the government’s plan to bring Peps within the Isa wrapper, it announced that it would align the qualifying investments regime by allowing investment trusts with rental income to be held in Isas.
In addition, it will allow funds that were held in Peps to be invested in the full range of Isa-qualifying companies.
However, Ian Sayers, deputy director general of the AIC, says no AIC members have trusts with this type of income, which comes from holding leasehold properties.
Housing investment trust legislation was introduced in 1996, but limits on how much could be invested and restrictions on holding them in Isas discouraged the launch of any HITs.