View more on these topics

Govt looks set to go ahead with axing Isa tax breaks

Government plans to scrap the dividend tax breaks on Isas in 2004 seem unlikely to be revised despite continued pressure from the Pep & Isa Managers Association.

In a meeting with Treasury Financial Secretary Ruth Kelly last week, Pima chief executive Tony Vine-Lott argued that abolishing the 10 per cent tax break on Isa dividends would prompt up to 50 per cent of investors to shun equity Isas.

He told Kelly that the move would simply encourage investors to move into cash Isas – set to retain their 20 per cent tax break – which he pointed out is at odds with the Government&#39s desire to close the savings gap.

However, Vine-Lott says Kelly was reluctant to state a position and made no mention of any potential reversal. The Treasury is known to be highly resistant to keeping the tax breaks, with Ron Sandler making clear in his report that he believes they do nothing to encourage people to save.

Vine-Lott says: “We made several useful points and we will keep on about it. The tax breaks are not just right for the industry, they are right for the Government&#39s objectives too.”

Simpsons of Brighton IFA partner Mark Waters says: “Dividend income will increasingly be a part of total return. The Government may still change its mind but I think it is hoping that the issue will go away quietly.”

Recommended

&#39White label ban will hit small fund firms&#39

Product providers will not be allowed to sell other products branded as its own as white labelling is to be banned by the FSA in its depolarisation proposals.In its place, the regulator has opted for a system which it is calling co-branding, where the distributing provider must tell consumers who has manufactured the product that […]

No faith in the majority

So, the majority of IFAs see rises in base rates and the FTSE. I do not like majorities because they are virtually always wrong.One of the tenets of my business is that I tell clients all forecasts are wrong, including mine. However, I think that most IFAs must be living on Planet Zog because it […]

Radical rethink to give public greater choice

Sweeping changes to the polarisation regime will end many restrictions on what business a firm can conduct.The FSA proposes removing the barriers to choice in draft regulations for the depolarised world, which could become a reality by the end of the year. Multi-ties are created, gap-filling is allowed, the better than best rule is scrapped […]

Inside Edge

With the Government continuing to rule out pension compulsion, how can the industry help in the take-up of stakeholder pensions?Against a backdrop of world political instability and tumbling economic markets, it would be easy to forget the problems we face in our own backyard. One of the biggest is the risk of impending poverty for […]

Trouble ahead - thumbnail

Pensions: trouble ahead?

The pace of change in the pension’s space has been little short of astonishing, and has left thousands of employers struggling to keep their pension policy compliant, and also on the right side of current best practice and governance. Many employers, and indeed many in the pensions industry itself, would like to see a period of no change during the next term of government. This would give all sides a chance to catch up and draw breath. 

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    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

    Email: customerservices@moneymarketing.com