The pre-A-Day section 32 market has been virtually killed off by a Revenue & Customs’ move to block unnecessary pension transfers, says Norwich Union.NU head of pensions Iain Oliver says it is no coincidence that this move follows swiftly from the FSA’s warning that it will closely monitor all section 32 business and clamp down on anything it classes as churning. Oliver believes the regulators were spurred into action after seeing a number of providers market regulation changes as a driver for s32 business. The Revenue’s move to ensure that people in schemes that wind up after A-Day will have full tax-free cash protection removes the basis for the vast majority of s32 adv- ice, he says. This makes s32s a very niche product suited for deferred members or those transferring from more restrictive old s32 contracts, adds Oliver. In a separate move, the Revenue has also effectively stripped all benefits from clustered s32s, rendering them inert as an IHT planning tool. Standard Life marketing technical manager John Lawson says clustered s32s, which enable holders to phase their tax-free cash payments will now face IHT charges on any unvested clusters in over 95 per cent of cases. Scottish Equitable pensions development manager Rachel Vahey cautions that the Revenue’s wording is not clear and s32s remain valid for some clients. Oliver says: “There has been a campaign by some providers to use Revenue rule changes to justify s32 sales. When you hark back to what the FSA said, it is no coincidence or surprise to me that the Revenue made changes to the rules straight after this.” Vahey says: “That is a bold statement to make at this juncture. This does seem to be a sea-change by the Revenue but we need more detail from them.” Lawson says: “For 95 per cent-plus of the age 55-75 population, segmented sect- ion 32s offer nothing that an EPP or other occupational money-purchase scheme cannot also offer.”
School leavers could face a shortfall of around 10,900 on university costs because parents save to meet higher education costs with cash rather than through shares, according to research from Fidelity International. The firm says a typical investment of 50 a month in the stockmarket over the past 18 years would have created a savings […]
Matrix says it has instructed solicitors to sue the 30m Quantock UK growth fund for 850,000 over the way it was transferred to Marlborough last month. The case centres on Marlborough raising its fund of funds’ holding in Bob Brown’s fund to 4m, forcing an EGM sand voting to transfer the authorised corporate directorship from […]
The tax changes that will come into force on April 6, 2006 were designed to achieve a number of outcomes, one of which was to apply retrospective taxes to what the Government regards as the excessive pension savings accumulated by many so-called fat cats.
In my latest series of articles, I will be look- ing at the current state of investment markets, covering the main asset classes used in portfolio construction – cash, fixed interest, property (direct investment and property shares) and equities.
By Kunal Desai, head of Indian Equities, Neptune India is officially the world’s fastest-growing major economy and remains firmly on track to become the third-largest economy by 2030, overtaking Japan and Germany. As an accelerating labour force combines with increasing labour productivity, is India getting too big to ignore? Click here for full article […]
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