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Disputed £3.5m adviser tax error unearthed by SJP goes to trial

Two pension trustees who launched legal proceedings against the advice firm that was formerly Truestone Wealth Management have been granted a court date in early 2020.

According to Law360 UK, two acting trustees of London-based directors’ retirement and death benefit scheme Radley Yeldar claim a mistake made by an adviser at Truestone has cost them £3.5m.

Truestone has since rebranded to HGP and will fight the claim of professional negligence alleging their adviser missed a tax deadline in 2009 for obtaining enhanced protection for the trustees’ pension scheme.

The issue was uncovered by St James’s Place who took over from HGP as the trustees’ advisers and encouraged them to take the concern to HM Revenue and Customers in 2012.

The trustees say securing the additional protection would have prevented the pair from being affected by the government’s introduction of the lifetime allowance on their pension benefits.

With the pension benefits now subject to LTA, initially set at £1.5m, the trustees argue they have lost millions that could have been protected.

The trial is expected to last a week and will begin between January and March of 2020, according to a High Court order.

Both sides are expected to rely on expert evidence and actuarial valuation, the order adds.

Barnett Waddingham actuary Graham Cooper has been listed as the trustees’ expert, while HGP will bring Alan Finch of Rowanmoor Actuarial Consultancy.

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Legislation in relation to enhanced/primary protection (unlike all other forms of protection) provides for HMRC discretion to accept late applications in exceptional circumstances. If it considered this case but did not feel that the exercise of its discretion was merited, that’s not a positive indicator for the claimants.

  2. Were the advice firm appointed to provide full advice, or merely investment advice. If the trustees followed the letter of the law, and appointed an investment adviser to provide investment advice then they are probably stuck. If the engagement included pension advice, or a duty of care to the beneficiaries of the pension scheme then the claim will probably succeed.

    It’s difficult to see the loss to the trustees – it is the beneficiaries who will lose out. They may of course be the same people.

    If they are separate people then I would think that the trustees have liability – is this claim perhaps trying to pass a liability up the chain?

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