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Trust problem over PTA

Syndaxi Financial Planning managing director Robert Reid has called for HM Revenue & Customs to clarify its position on the assignment of death benefits in trust on pension term assurance policies to avoid misselling.

Reid said there is a danger that advisers will regard PTA as the default option for life cover. Although it is suitable for many people, Reid said there are circumstances where it is not appropriate, including business protection, because HMRC is not clear on whether these can be written in trust.

He called PTA the poor relation in the Registered Pension Scheme Manual and warned advisers to be careful when writing policies in the business loan protection market until they get clarification.

He said: “HMRC need to ensure that there is some serious hole plugging done in the manual if we are to avoid misselling PTA.”

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