View more on these topics

Ban on tax-free asset switch

by James Salmon

The Government looks set to ban scheme pensions from passing on assets tax-free.

In the pre-Budget report, the Government says it will introduce measures in the Finance Bill 2007 to prevent scheme pensions being used as a route to pass on savings without incurring inheritance tax.

Standard Life head of pensions policy John Lawson spotted the loophole in May and accused Axa of exploiting it to market its SSAS.

The Revenue vowed to clamp down on any abuses, possibly retrospectively, but Lawson said this was not made clear in Axa’s marketing material. Axa strongly denied the allegations.

Lawson says: “Growth in the SSAS and family Sipp market is likely to stagnate as a result of these changes. There is no point investing in scheme pensions because the benefits of any investment gain cannot be passed on at death, yet you run the risk of running out of funds. It would appear that the stay of execution on scheme pension residues has run out.”

But Axa head of pensions and savings policy Steve Folkard says: “SSAS provides flexibility for members on assets. Investments in SSAS are no different to other drawdown products.”

Hargreaves Lansdown head of pensions research Tom McPhail says: “Given the Government’s current attitude, it seems that any loopholes of this nature are going to be firmly closed.”


Tech can halve processing time

Effective use of technology can make advisers much more efficient, says Distribution Technology. It says IP policy transaction times can be halved while for investment products the saving can be 32 per cent.

Defining points

There will be big changes in private, public and state pension provision

Nigel Speirs

Mounting frustration with product providers led the chief executive of Wales’ biggest IFA firm, Buckles, to take them on with his own investment product, the Snowdonia Oeic. In an interview with James Salmon, he explains why IFAs should refuse to be subservient to providers and what he believes is wrong with principle-based regulation.


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm