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Scot Mutual rethinks s32 buyout guidance

Scottish Mutual has been forced to clarify its pension transfer guidance after concern that it was misleading IFAs over section 32 buyout policies.

The company must clarify its understanding of the latest draft personal pension transfer regulations which featured in its Tech Talk bulletin earlier this month.

ScotMut told IFAs that S32 policies bought before April 6, 2001 are not required to pass a GN11 funding test although the Inland Revenue has since said that this is not the case.

If ScotMut had been right, this would have created a short-term sales opportunity for IFAs, who could have used the information to drum up S32 transfer business ahead of rule changes requiring GN11 testing.

The company says since the issue of its IFA bulletin, it has had further clarification from the Revenue through the ABI confirming that the GN11 test is still required in many cases.

ScotMut manager of public relations Christine McAll ister says: “Tech Talk explains our current understanding of a topical subject.

“We state on the bulletins that information is subject to clarification and updating so it is not a case of withdrawing the previous information. We will be issuing further guidance shortly.”

But experts say there is still a “buy now while stocks last” sales opportunity brought by the changing transfer rules.

Scottish Equitable IFA trai ning manager Peter Will iams says: “Every independent adv iser worth their salt should be examining their high-net-worth clients to see if they are significantly better off transferring under the terms of the existing GN11 test than they would be under the proposed test. Our sales actuaries suggest that many will be.”

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