HM Treasury has published a discussion paper proposing two options for reforming the existing stamp duty reserve tax (SDRT) regime for surrenders and redemptions of units in unit trusts and shares in open-ended investment companies.

The options are:

1. An annual charge, based on assets under management.

2. A simplified version of the existing regime, based on surrenders of units.

Both options are intended to streamline the compliance burden for funds and to make the regime easier for fund investors to understand. The proposed changes are intended to be revenue neutral overall. The impact on individual funds will depend on a number of factors, including rate of investor turnover.

Comments on the discussion paper are requested by 25 January 2008.