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Reliance Mutual takes Hearts in friendly first

Reliance Mutual Insurance Society has bought friendly society Hearts of Oak.

The deal is believed to be the first to use the new powers introduced under the 2007 Finance Act, which enable friendly societies to be acquired by insurance companies without the loss of the beneficial tax treatment of their business.

Hearts of Oak has been renamed Hearts of Oak Insurance Company and the deal concluded in the High Court last week. Hearts of Oak, which has been closed to new business since 1999, has £320m assets under management and 66,000 policies including with-profits and unit-linked endowments, personal pensions and annuities.

Reliance chief executive Mark Goodale says Hearts of Oak was suffering from a declining policy base, rising costs and falling financial resources.

He says: “The situation that Hearts of Oak faced is not unique among friendly societies. With the recent legal tax changes, our industry has entered a new chapter in the future relationship between a friendly society and an insurance company, and we would be happy to talk to other societies facing similar issues.”

Beachcroft Wansbroughs head of financial services Nigel Frudd says: “I think this change in law will spark a lot more activity in this area.”


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Legal & General has appointed Martin Noone as protection sales director. He will be responsible for protection sales through the IFA channel. Noone previously ran Bupa’s individual protection and group risk sales operation.

No surrender

I concluded my last article – relating to pension rights in divorce proceedings – by expressing my opinion that pension sharing orders will become more widely used in the longer term as their relative simplicity is accepted.

Derek lines up dominoes

I am about to sell a substantial investment but am concerned about the tax implications. Is there anything I can do to offset the capital gains tax liability?


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