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A tax law shake-up which came into force last month could benefit investors in exchange traded funds, according to a major provider.

iShares, which provides ETFs for Barclays Global Investors and offers 59 ETFs all domiciled in Dublin, is claiming portfolio holders stand to make "real tax savings" on capital gains thanks to the changes.

As of 6 April, the investors will see a flat rate CGT of just 18 per cent on the funds, which will have a UK offshore distributor status, compared to 24 per cent previously.

Research by Deutsche Bank, reported by Financial Adviser in February, claimed there was "a growing interest" in ETFs, at the expense of future contracts, which they were outperforming on the Dow Jones Euro Stoxx 50 index.

Nick Shellard, UK sales chief of iShares, said: "While the changes to the taxation laws do not impact extensively on ETFs, it is vitally important that investors are careful to review the government's new regulations and understand how they do impact ETFs, particularly as they become an increasingly mainstream product for high net-worth individuals.

"While iShares can provide information to investors with a high level summary guidance on the tax implications, the tax treatment of iShares, including rates and relief, are dependent on an investor's own tax circumstances and we recommend that all clients seek specialist tax advice from their own tax advisers."