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IFA hopes Snowdonia will be cash mountain

Family-based occupational pension schemes may not be the inheritance tax shelters that many advisers expect, experts are warning.

Technical Connection pensions consultant John Page says the Inland Revenue has hinted that the new alternatively-secured pensions will attract an IHT liability.

Under the Government&#39s current proposals, alternatively-secured pension holders will be able to pass on benefits to other non-dependent scheme members upon death.

The cost to the Revenue in missed IHT could be as high as £10bn a year from 2006. Revenue clarification is expected soon.

Page says as alternatively-secured pensions will only be open to those aged 75 and over, many observers expect transfers to non-dependants to be IHT-free and an attractive feature of the new regime.

With residential property able to be held within a pension wrapper from April 2006, the scope for IHT avoidance is massive.

It is expected that more than one residential property can be held within a pension plan as long as the asset is an investment and returns are not classified as trading profits.

Independent pensions consultant Ros Altmann says: “The £10bn loss of IHT income would dwarf the £7bn cost of means-testing and would primarily benefit the financially secure rather than those who most need incentives to save for their retirement.

Welsh national IFA Buckles is introducing a suite of multi-manager funds after securing commitments for the minimum £1.5m needed to make the launch viable.

The portfolios will form the core of Buckles&#39 investment proposition for clients outside the high-net-worth bracket.

The Snowdonia funds will include balanced, income and growth vehicles. Management of the funds has been outsourced to Mercator, Premier Asset Management and Rensburg respectively.

Buckles aims to raise £25m across the range in 12 months and is in discussions with a number of insurers to link the portfolios to their life bonds.

Cash committed for launch is predominantly from Buckles&#39 own clients, with it targeting Pep and Isa transfer business.

Charges are 5.25 per cent initial and 1.5 per cent annual. Upfront commission is 3 per cent with 0.5 per cent trail.

Chief executive Nigel Speirs says while IFAs will lose commission uplift from multi-tie arrangements, they will gain by maintaining or growing sales volumes through client loyalty.

He says although multi-manager funds are expected to become increasingly popular after depolarisation, his firm is committed to staying independent.”


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