Legal Action

JPMorgan Fleming Claverhouse IT PLC
21 January 2004

                       LONDON STOCK EXCHANGE ANNOUCEMENT

              JPMORGAN FLEMING CLAVERHOUSE INVESTMENT TRUST PLC


AITC AND JPMORGAN FLEMING CLAVERHOUSE INVESTMENT TRUST INITIATE LEGAL ACTION ON
VAT TREATMENT OF MANAGEMENT FEES



The Association of Investment Trust Companies (AITC) and JPMorgan Fleming
Claverhouse Investment Trust plc have jointly launched a legal test case against
HM Customs and Excise to challenge whether VAT should be charged on the
management fees of investment trusts.



Daniel Godfrey, Director General of the AITC said: 'The Government's continued
refusal to grant investment trusts the same VAT exemption as that accorded to
unit trusts and OEICs is contrary to the European Union's Sixth VAT Directive.
This discrimination costs the shareholders of investment trust companies £30
million a year and is the reason why we have launched this case.'



Ron Sandler recognised this discrimination in his Review of Retail Savings and
recommended that the Government level the playing field.  'We were very
disappointed that, following subsequent consultation, the Government has failed
to act.  Whilst we would have preferred a political solution, we cannot wait
forever whilst our Members and their shareholders suffer from the wrongful
application of VAT and the time has now come to challenge this through the legal
process.'



Robert Walther, Chairman of the JPMorgan Fleming Claverhouse Investment Trust
plc said: 'VAT on management fees costs our shareholders in excess of £300,000 a
year, a cost the company would not have to bear if it were a unit trust or OEIC.
  This is undoubtedly unfair and we are working with the AITC to secure an
exemption from VAT for the long-term benefit of our shareholders.'



The discrimination against investment trusts stems from the way the Government
has interpreted European legislation.  Under the Sixth VAT Directive 'special
investment funds' are entitled to an exemption from the VAT that they would
otherwise pay on the costs of outsourcing their management services.  The UK
Government has interpreted this entitlement in a way that means that unit trusts
and OEICs are currently eligible for this exemption, yet despite carrying out
essentially the same activities and competing in the same markets, investment
trusts do not receive the same tax exemption.



Ron Sandler's Review into Retail Savings recommended that this VAT inconsistency
for investment trusts should be removed and stated that the VAT treatment of
investment trusts, along with other tax distortions, confused consumers and
restricted competition.



21st January 2004



For further information please contact:

Jonathan Latter
J.P. Morgan Fleming Asset Management (UK) Limited - Secretary
Telephone: [phone]


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