Burford says proposed US tax measures 'not precise enough'

(Sharecast News) - Burford Capital cautioned on Tuesday that proposed tax measures targeting litigation finance in the US Senate's draft budget reconciliation bill remained too vague to determine their potential impact, as it emphasised the uncertainty surrounding the bill's passage. The AIM-traded legal finance firm said the Senate version of the bill, released late on Sunday, included a provision that would raise the statutory tax rate on litigation finance transactions.

However, it stressed that the language of the proposal lacked the precision needed to assess its implications, particularly in the absence of guidance from the US Internal Revenue Service.

The measure did not appear in the version of the bill already passed by the House of Representatives.

Burford noted that substantial differences between the House and Senate drafts would require a complex reconciliation process, with further negotiations, amendments, and votes needed before any final legislation can be passed.

Burford, which provides capital for commercial legal claims, warned that increasing the tax burden on litigation funding could hinder access to justice and dampen business innovation.

The company said it was hopeful that US lawmakers would recognise the broader economic benefits of litigation finance and avoid discouraging its use through punitive tax policy.

At 0909 BST, shares in Burford Capital were down 3.29% at 899.38p.

Reporting by Josh White for Sharecast.com.