View more on these topics

Revenue drops controversial proposal for one-off levy on non-profit funds

HM Revenue & Customs has dropped plans to tax investment reserves on insurers’ non-profit funds following intensive lobbying by the ABI.

Legal & General says the removal of the charge, which would have been a one-off levy on non-profit funds that do not pay out income and gains, will save it up to 500m.

The Revenue was criticised by the ABI, along with several providers, for not consulting the industry on its proposals, which were widely labelled a “smash and grab” raid that flew in the face of the FSA’s drive to get insurers to improve their solvency margins.

Although the proposals were intended to stop tax avoidance, they were regarded as so broad that they could end up hitting with-profits investors.

Other leading insurers, including Prudential and Friends Provident, said they would not have been affected by the charge.

ABI director of financial regulation and taxation Peter Vipond says: “This is a substantial improvement on the original proposals and we recognise Revenue efforts to address industry concerns.”

An L&G spokesman says: “The legislation as now proposed will have no tax consequences for the company.”


Simple arithmetic

Is there a conspiracy going on here? Could the real reason for David Blunkett’s resignation be that he just couldn’t get his head around pension simplification? If so, I suspect he is in good company. Four different Work and Pension Secretaries in just one year must prove something. I hope John Hutton knows what he […]

Trust discounts narrow to 7.4%

The average investment trust discount has narrowed to 7.4 per cent – the lowest level in more than a decade – after two years of strong market growth, says the AITC.

Aberdeen takes on life firm in Deutsche deal

Aberdeen Asset Management is looking to make an impact in the defined-contribution pension market after acquiring a life company as part of its Deutsche deal. The firm is rebranding Deutsche Asset Management Life and Pensions Company into Aberdeen Life. Aberdeen head of sales and marketing Gary Marshall will become chief executive of the life company. […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment