View more on these topics

What advisers are saying: Instant gratification – Scratching the itch with a tax stick


GAAR has yet to have any notable impact on the business operations of the majority of adviser firms we’ve been speaking to.

Despite the sea change only a tiny proportion (8 per cent) of advisory businesses have a GAAR strategy in place, suggesting that while the game’s changed, advisers may still be playing by old rules.

This is unlikely to have a happy ending: though in York it is perfectly legal to shoot a Scotsman with a crossbow upon seeing one (except on Sundays) normal murder charges may possibly take precedence. It pays to keep abreast of these things.

Most advisers (75 per cent) don’t believe that GAAR has directly impacted (or limited) their choice of solutions, on the face of it putting paid to claims that ‘boring is the new exciting’ when it comes to tax planning.

But these views need to be considered against an already fairly conservative backdrop where a) most already eschew more esoteric solutions and b) the level of understanding of GAAR details remains limited at best.

Looking at the implications, only a quarter of advisers believe that GAAR has had a direct impact on the appropriateness of specific tax planning solutions:

All advisers with sufficient knowledge and experience of Business Property Relief feel comfortable that GAAR has not diminished its relevance or appropriateness (under the right circumstances).

As with BPR, the majority (62 per cent) of advisers feel that the legitimacy of Enterprise Investment Schemes remains unchallenged by anti-avoidance rules. 10 per cent, though, admit that while EISs remain on the table, they are more cautious about using them. Over a quarter (28 per cent) are unsure and will avoid them completely due to perceived risk.
Nearly a third of advisers will avoid venture capital trusts.

Very few advisers (just 5 per cent) have a clear and complete understanding of the rules in relation to GAAR. Though most expect to partner with external specialists to a greater extent (in instances where the level of expertise required falls outside their sweet spot) it is striking that advisers seem in no rush to get fully up to speed themselves – 71 per cent of those without a complete understanding of GAAR feel there is nothing specific they require further clarification on, either because they believe the rules have little impact on their day-to-day role or because they believe that only a basic understanding is required to ensure they avoid anything remotely contentious.

The concerning thing from an advisory and client perspective is that legitimate planning (with good, non-contentious tax outcomes) could be wrongly under-used if tax optimisation decisions are based on perception and feeling rather than fact.  While perception may be reality, it may also be wrong.

Phil Wickenden is managing director of So Here’s The Plan

Extracts from IFA interviews…




Skandia appoints research head for Select range

Skandia has appointed former Julius Baer executive director Stuart Clark as research manager of investment solutions. Clark will be responsible for research into Skandia’s new Select range. He has previously held roles at Merrill Lynch Wealth Management, UBS and BDO Investment Management. Skandia head of investment solutions Dean Bowden says: “I am delighted Stuart has joined […]


Premier to merge three funds after naming new CIO

Premier Asset Management has appointed a new chief investment officer and unveiled plans to merge three funds into a single global equity portfolio. Neil Birrell joined Premier in January and has over 25 years of investment experience including as CIO of Framlington Asset Management. He will become the firm’s new CIO after Mike Jennings departs. […]


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