ABI urges foreign branches exemption plea

The ABI has urged Alistair Darling to confirm tax exemption for foreign branches when he presents next week’s Budget.

Outlining its pre-Budget wish list, the ABI said the chancellor should boost the UK’s competitiveness as a global financial centre by allowing profits made in foreign branches not to be taxed when bought back to Britain.

ABI Director General Kerrie Kelley said: “insurers are rightly worried about an uncompetitive tax system which harms global businesses based in the UK. With 2011 the earliest possible date for legislation, we need a clear message from the chancellor in this Budget on the taxation of foreign branches. It would help convince companies to be based in the UK, as good news next year may be too late for some.”

The ABI also called for the Chancellor to commit to selling more index-linked and long dated gilts to provide pension fund and insurers with long-term assets. And it said next week’s announcement should not include any measures which further discourage saving, citing research it had carried out showing that 55% of people believe that the benefits of savings had gone down over the last year.