View more on these topics

Standard simplifies IHT plan structure

The Investment Management Association has called for an urgent summit meeting with the Treasury in a bid to save tax breaks for hundreds of funds.

The IMA called the Treasury last week after spotting small print in
the pre-Budget statement that could spell the end of corporation and
capital gains tax breaks on qualified investor schemes.

The Government plans to clarify the position of unit trusts which
have multiple asset classes of units and introduce measures that
apply tax breaks only to those funds where each investor holds less
than 10 per cent of the fund.

This could spell disaster for many funds held by life companies,
particularly firms such as M&G, Morley and Legal & General
unit trust management, which all have heavy investment from parent
companies Prudential, Aviva and Legal & General respectively.

On top of this is money invested from fund supermarkets. Fund
managers do not see the end client with these investments since the
money is invested in the name of the supermarket.

The change stems from Chancellor Gordon Brown’s tax avoidance
crackdown. The Treasury is concerned that high-net-worth investors
could get funds together and create a private fund to get tax breaks.

IMA director of regulation and taxation Julie Patterson says she was
stunned when she saw the planned rule changes, particularly since
they use the expression “introducing a measure” rather than a
consultation. She says: “This could be a real problem and we need to
see exactly what the Treasury intends. There was some indication that
they were planning something like this but to go ahead without any
further consultation could be damaging. It is as though they do not
fully understand how these investments work.”

Standard Life has relaunched its IHT loan plan with a simplified
application process and a choice of two trusts.

The plan allows the client to retain access to their capital and is
based on the firm’s range of life bonds. Clients lending capital to
appointed trustees can use the bond’s annual 5 per cent capital
withdrawal facility and any growth in the bond is outside the
client’s estate.

Standard says its rethink of the plan reflects increased interest in
IHT planning products.

Its prior offering had a complex application process, with different
offerings sold in the Scottish, Northern Ireland, English and Welsh
markets. The revamped offering has just one simplified application
form and is a multi-jurisdictional product.

Senior technical manager John Lawson says both absolute and flexible
trusts are available. Both run for 76 years and investors pay the
standard bond charges.

Lawson says: “We have simplified the application process and there
is a Q&A for the adviser to run through with their clients and
the bond has a fund supermarket behind it. With the house price
crunch, many more homeowners are facing IHT liabilities and IFAs are
also looking to diversify away from regular to single-premium


FSA warns 4,500 firms have not applied for general insurance regulation

FSA today named the ‘hotspot’ sectors of firms selling insurance who have yet to apply for authorisation and warned them to do it now or risk losing business before regulation comes into force on January 14.Whilst over 14,000 insurance firms have registered with the FSA to apply for authorisation, with less than five weeks before […]

Harris on mortgages

Competition is definitely a good thing – and nowhere is this more true than when it comes to mortgages but herein lies the problem – HBOS. Don’t get me wrong, this is not have-a-go-at-HBOS time.

Reasons to be cheerful

Although the merger with Isis has seen several staff leave, there is one F&C emp-loyee who is clearly delighted with this job. In a surefire bid at making it into F&C Santa’s good books, head of European small caps Crispin Longden ends his normal answerphone message with a jolly little song to the tune of […]

Depolarisation edge: Gareth Marr

Independent advice is a product in itself that ought to be viewed as a stand-alone commodity. It is not a means to sell products to customers, it is advising them on everything that they need to organise their finances.

The curse of long-term cash

Trevor Greetham, Head of Multi Asset at Royal London Asset Management, reveals why clients should be seriously concerned when short-term holdings of cash turn into a long-term investment. There is nothing wrong with holding wealth in the form of cash on a short-term basis. For many people capital stability is important and access to ready cash […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm