View more on these topics

Why is Standard on this mission?

John Lawson of Standard Life seems to be on a mission to wind up the Treasury. That is usually a jolly wheeze but I fear that lasting damage will be done to the industry.
Last year, he inaccurately and very publicly suggested that the Treasury would be giving away 4bn in tax relief on residential property in Sipps. Shortly afterwards, the Treasury executed its abrupt U-turn, which he promptly described as outrageous.

In his May 4 article, he advocates borrowing 78,000 to wash through a registered pension scheme, in a series of steps in which an increased pension commencement lump sum is clearly envisaged. We are told this is all above board and Standard have already begun to discuss it with some IFAs. But it seems clear to me that the example in the article given will if applied to most real-life circumstances be caught by the anti-recycling legislation.

The resulting tax charges would be punitive. If, for example, the scheme is a one-person scheme with no other funds in it, the total immediate tax charges, including a deregistration charge, would probably be close to 50,000.

In the May 11 edition, he publicises a massive loophole that we are very excited about, exploiting a particular form of pension. Presumably, we can look forward to him telling us how outrageous it is when the Treasury, having read a copy of his latest piece, adds yet another overly blunt anti-avoidance measure to this years Finance Bill to close this loophole. Anyone reading Standards output on small self-administered schemes and Sipps would be forgiven for thinking that they alone were aware of all these issues.

They are not.

Many of us who have been close to the heart of the legislative process for some time know that the legislation has more holes in it than a sieve but we also think that what is genuinely outrageous is the use of these sensationalised stories to gain publicity, given the kneejerk reactions they inevitably produce in the Government.

Does Standard not understand how paranoid the Treasury is about tax abuse in pension schemes? Have they not read the mass of anti-avoidance measures already in the latest Finance Bill? What is a household-name insurer with Standard Lifes market profile doing anyway, pushing cynical tax planning ideas using a type of scheme in which it previously seemedto have little interest? Does it want to play a long-term part in building a stable tax regime, or not?

Nick White, Solicitor, White & Co, Teignmouth, Devon

Recommended

Advisers told of potential flaws in Islamic loans

Advisers who offer Islamic mortgages are being warned of potential flaws compared with standard mortgages. Interest in Islamic mortgages to service the estimated 1.6 million Muslims in the UK is expec-ted to rise after the FSA last month opened a consultation on the regulation of home-purchase plans, as they are also known. The regulations are […]

This week in Regulation

Bashing the FSA’s treating customers fairly regime would appear to be all the rage once again. It seems everyone is straining at the leash to knock the jewel in the FSA’s principles based crown, from top industry bosses such as Park Row chief executive Peter Sprung, to the Law Society.

SimplyBiz links up with Lifetime

SimplyBiz and wrap provider Lifetime have formed a strategic partnership, with the aim of removing much of the complexity facing advisers and clients.

FSA says exploit Mifid opportunities

The costs of implementing the EU Mifid directive will only be worthwhile if firms exploit the opportunities provided by the directive, such as cross border trade, says FSA managing director Hector Sants.

Thumbnail

Neptune video: UK economy: a sustainable recovery?

After years of a slowly brewing economic recovery, the UK has seen a strong rise in growth in recent months. Mark Martin, manager of the Neptune UK Mid Cap Fund, discusses the strength of this recovery and whether it is sustainable.

In the video, Martin addresses the following:

• Structural features supporting the UK economy
• UK mid-caps and the potential for M&A activity
• Valuations and opportunities in house builders

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment