The UK is now a competitive fund domicile, says the Investment Management Association (IMA), with its wide range of well-governed, well-managed and tax-efficient funds.

Changes to legislation and the approach that UK authorities take have reversed the view that the UK is not an attractive fund domicile, said the IMA, and further positive developments are also under discussion.

"The UK's tax regime for authorised funds was unnecessarily complex," said Julie Patterson, director, authorised funds and tax at the IMA, at the 3rd Annual Global Financial Services Centre Conference in Dublin. "Tax-paying investors pay the same amount of tax as if they had invested direct, but tax-exempt investors (such as pension funds, charities and ISA investors) could not recover the tax paid in the fund. Also, there was concern about the lack of consultation, trust and understanding of and between the funds industry and government officials. This is no longer the case."

The introduction of tax-efficient securities and property funds and a workable regime for institutional funds have contributed to the UK's success as a fund domicile, as has new dialogue with the industry by government officials.

"Moreover, there is also now a parity of treatment of distributions from UK and offshore funds, and an easing of the fund-specific Stamp Duty Reserve Tax regime. The UK's extensive double tax treaty network continues to enable authorised funds to secure treaty benefits, which is an advantage over other fund domiciles and benefits investors in improved returns. And there are further improvements under discussion, including the introduction of tax-transparent contractual funds, an onshore hedge fund regime and in relation to funds investing in other funds."

Patterson added that the UK's robust governance framework has stood the test of the Credit Crunch, a tick in the box for the consumer.

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