Budget 2021: Infrastructure and renewables funds hit by corporation tax hike
The corporation tax hike will hit the valuation of listed infrastructure funds, including those investing in renewable energy assets, says stockbroker Stifel.
The chancellor’s decision to hike corporation tax in today’s budget will hit the valuation of listed infrastructure funds, including those investing in renewable energy assets, according to stockbroker Stifel.
Rishi Sunak announced corporation tax would increase from its current level of 19% to 25% from April 2023, one of a number of moves aimed at reining in the ballooning UK deficit.
That will see infrastructure funds pay a higher rate of tax on the income they derive from their assets. The change will not just result in a smaller pool of income to pay shareholders dividends but will hit their underlying valuations, which are linked to their future cashflows.
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