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Cash ‘sweeteners’ could be taxed

The Government is considering taxing cash “sweeteners” used by trustees to persuade employees to transfer out of final-salary schemes.

Peter Askins, a senior off- icial at the Department for Work, is thinking about a range of options to clamp down on the growing trend of firms offering cash ind- ucements to employees to manage down their pensions liabilities.

Speaking at a recent event held by actuarial consultancy Punter Southall, Askins said: “The DWP has to consider the taxpayer and whether these payments should be taxed.”

He also warned if people accepted cash when they moved their pension “this could be considered wilful deprivation of capital when it comes to assessing benefits”.

Last month, Faculty of Actuaries president Stewart Ritchie warned IFAs would be made the scapegoats for yet another misselling scandal if employers believe they lost out by accepting “sweeteners” to transfer out of final- salary schemes.

Aegon Scottish Equitable head of pensions development Rachel Vahey says: “IFAs are being put into an impossible situation. When tax-free cash is being offered on top of the transfer value it takes a hard-nosed, pension-savvy IFA to turn clients away. We need clarity from Government and the regulators as to how they view transfers to help avoid retrospective action.”

Worldwide Financial Planning IFA Nick McBreen says: “These changes would make the situation even more complicated for everyone. IFAs should steer clear of advising on sweeteners.”


Focus Capital setting up multi-assets fund

New multi-manager Focus Capital is set to launch a multi-asset class emerging markets fund of funds in the new year. The firm, headed by former Standard Asset Management chief investment officer John Cleary, was established in September as a specialist global emerging markets boutique. The fund will invest glob-ally in emerging markets across asset classes, […]

Threesixty signs deal with The Insurance Surgery

threesixty has secured a deal with The Insurance Surgery offering its clients specialist risks insurance.The Insurance Surgery has sourced life insurance and other financial products for clients in special risk areas, such as pre-existing medical conditions and dangerous past-times since 1999.threesixty clients will be offered two service levels: a straightforward consultancy on a flat-fee basis, […]

Fears that Nutt could be stretched by global fund

IFA reaction to Jupiter’s planned global income fund has been mixed, with some advisers voicing concerns that star manager Anthony Nutt may become overstretched. Nutt already runs £4bn in retail money split across the £3.4bn income and £600m high-income trusts. Bestinvest head of communications Justin Modray says: “My main concern would be whether they are […]

Government to build additional 100,000 new homes

Housing Minister Yvette Cooper has confirmed up to 100,000 new homes will be built in areas considered “new growth points”.The proposals are designed to enable more first time buyers onto the property ladder. Cooper says: “If we don’t build more homes less than a third of today’s ten-year-olds will be able to afford a place […]


Case study: administration — managing group life schemes

Our client leads the global market in high-tech electronics manufacturing and digital media. The trustees of the company’s final salary pension scheme insure death-in-service lump sum and dependants’ pension death benefits for active employees, as well as dependants’ pension benefits for deferred members (those who have left service).


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