In September Moneymarketing.co.uk revealed that Transact was launching a QSP on its platform in Q4 this year, pending HMRC approval.
In a Transact adviser update, head of marketing Malcolm Murray says: “The attraction of a QSP is that, once contributions have been paid for at least seven and a half years of the ten year plan the proceeds are free of tax in the policyholder’s hands. Set up correctly, this means that the proceeds could be used to provide a tax efficient income, especially for higher rate taxpayers.”
Murray says in addition to other savings recommendations, financial planners should seriously consider the QSP to give another option when it is appropriate.
He says: “The fact that we find it difficult to predict the economic or fiscal circumstances that might exist in two year’s time, let alone twenty or thirty, highlights the need for planners to set about exploring as many alternatives as possible.”
In order to align the discounted gift trust underwriting procedure with the new QSP, Transact will now require the initial underwriting charges upfront. The initial cost of this underwriting service is £150 per settlor.