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Tax clientele effects in the term structure of UK interest rates

Levin, E.J. and Wright, R.E. (2001) Tax clientele effects in the term structure of UK interest rates. Journal of Business Finance and Accounting, 28 (3). pp. 303-325. ISSN 0306-686X

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Abstract

This paper tests for tax clientele effects in the term structure of UK interest rates. Five empirical models of the term structure of interest rates, incorporating tax effects, are estimated with daily data covering the period 31 March, 1995 to 3 August, 1995. In May 1995, the British government announced its intention to eliminate the tax exemption on capital gains from government bonds, but subsequently in July 1995 backtracked on some of its initial proposals. This period therefore forms the basis of a crude natural experiment in the sense that it provides an opportunity to examine tax clientele effects 'before' and 'after' an event which should have levelled greatly the taxing of government bonds. The empirical analysis suggests large tax clientele effects. However, there is little evidence of tax-specific term structures of interest rates.

Item type: Article
ID code: 3900
Keywords: interest rates, tax, economics, business finance, accounting, Great Britain, Economic Theory, Finance, Business, Management and Accounting (miscellaneous), Accounting
Subjects: Political Science > Political institutions (Europe) > Great Britain
Social Sciences > Economic Theory
Department: Strathclyde Business School > Economics
Related URLs:
    Depositing user: Strathprints Administrator
    Date Deposited: 23 Aug 2007
    Last modified: 04 Sep 2014 10:24
    URI: http://strathprints.strath.ac.uk/id/eprint/3900

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