View more on these topics

Huge call for advice expected as revenue shuts capital redemption bond loophole

The Inland Revenue has closed a tax avoidance loophole which could have major implications for firms holding capital red-emption bonds.

Corporate policyholders of these bonds will no longer be able to defer taxation on their interest-producing investments under the loan relationship rules which allowed them deferral of tax payment.

On February 10, capital redemption wrappers lost their benefit of tax deferral and are now liable for corporate tax charges annually. Tax was previously paid on gains when the bond was redeemed. All corporate holders of capital gains redemption bonds will be affected, not just those deliberately involved in artificial capital loss creation or tax avoidance schemes.

The Revenue says the changes will protect revenue for public services and ensure an unfair burden does not fall on taxpayers.

There is expected to be a demand for independent advice by corporate policyholders to determine whe-ther they should surrender a bond, accept a tax charge or switch to a multi-life policy and still benefit from the tax deferment.

Scottish Equitable International technical manager Margaret Jago says: “Are we going to be encouraging people to switch? I think we probably will. IFAs will need to determine why their clients set up the bonds in the first place. There will be a huge call for advice.”


Cross purposes

Lenders are cautiously waiting to see whether the FSA will impose rules proposed in the Miles review on cross-subsidy mortgage rates within the treating customers fairly regime.

Product matters

Residential investment opportunitieshave been high on IFA wish lists over the past few years but there has been precious little available to satisfy investor demand.

CML urges the Government to act on its six home-ownership pledges

The Council of Mortgage Lenders welcomes the Government’s support for home-ownership announced by the Prime Minister as one of his six pledges for the forthcoming general election. Following the announcement, the CML would urge the Government to take their pledges further.It would like the Government to implement the five-year housing strategy recently announced by the […]

Indian market rallies as Modi's popularity strengthens

Kunal Desai, manager of the Neptune India Fund, comments on the implications of the BJP’s historic election win in India’s most populous state, Uttar Pradesh. Read the full article here Important Information – for investment professionals only. Not for retail clients.  Investment risks  The Neptune India Fund may have a high volatility rating and past […]


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