Excerpt:
Firms involved in Islamic finance are lobbying the British government for tax reforms, arguing that the treatment of some sharia-compliant structures is hindering their growth.
Britain has actively pursued Islamic finance to become the Western world’s biggest hub for it and banks are now seeking to ensure tax parity in areas such as mortgage refinancing as they compete head-on with their conventional peers.
Islamic finance forbids interest payments and transactions often require multiple title transfers of underlying assets, which can trigger double or even triple tax charges.
More than 20 firms, including Gatehouse Bank, Bank of London and The Middle East BLME.DI, Abu Dhabi Islamic Bank ADIB.AD and Qatar Islamic Bank QISB.AD, offer Islamic financial products in Britain.