UK drops plan to tax sovereign wealth funds

FILE PHOTO: Britain’s Chancellor of the Exchequer Jeremy Hunt holds the budget box at Downing Street in London, Britain March 15, 2023. REUTERS/Hannah McKay

LONDON  – British finance minister Jeremy Hunt has dropped a plan to tax sovereign wealth funds investing in Britain, according to a government document.

The report, detailing the measures in a budget plan announced by Hunt on Wednesday, said “the government has carefully considered” responses to its consultation on the immunity of sovereign funds from direct taxation.

“It has decided that there will be no change to the current exemption, and that it will continue to operate as it does now,” the document – which was first reported by the Financial Times on Friday – said.

The FT said business and trade minister Kemi Badenoch had urged the Treasury to drop the proposals out of concern that sovereign funds might pull out of projects in Britain.

Sovereign wealth funds from the Middle East and elsewhere have been big investors in some British infrastructure projects as well as in commercial property.