Britain cancels a plan to tax sovereign wealth funds

A government document showed that British Chancellor of the Exchequer Jeremy Hunt abandoned a plan to tax sovereign wealth funds that invest in Britain.

According to “Reuters”, the document, which details the measures included in the budget plan announced by Hunt on Wednesday, stated that “the government carefully studied” the responses to its consultations on the immunity of sovereign funds from direct taxation.

“It has decided not to change the current dispensation and will continue to operate in the same manner as it is now,” said the document, which was first reported by the Financial Times on Friday.

The Financial Times reported that Business and Trade Secretary Kimmy Badenok urged the Treasury to drop the proposals, fearing that sovereign funds would withdraw from projects in Britain.

Sovereign wealth funds from Middle Eastern countries and others have large investments in some British infrastructure projects, as well as the acquisition of real estate for commercial purposes.