Standard Life Wrap and Skandia are considering changing their rebate model following HM Revenue and Customs’ announcement that platform rebates will be taxed.
The firms are exploring two options; either asking fund managers for preferential share classes, possibly 10 basis points lower than the market average, or using clean share classes and asking managers for a smaller rebate of between 10 and 15 basis points, which would be subject to tax.
Both firms have previously shunned adding clean share classes to their platforms and suggested that customers got a better deal from the rebate terms they negotiate with fund groups.
Standard Life head of platform propositions David Tiller says: “We are disappointed to hear that HMRC has announced it intends to tax fund rebates. We wrote to HMRC outlining concerns with this position earlier this year.”
Skandia UK managing director Peter Mann says: “We could move to cleaner share classes, such as 75bps for equity funds, and still rebate from there, or look to provide access to more preferential share classes that reflect our scale.”
Investment Quorum chief executive Lee Robertson says: “The FSA and HMRC have had six years to sort this out. To put out this interpretation which affects so many different business models post-RDR is ridiculous.”