Earlier this month it was widely anticipated that HMRC would rewrite their adviser-charging guidelines following concerns raised by insurers that including implementation costs could result in a fifty-five percent unauthorised payment charge.
Now, the rewritten guidelines states that implementation fees can be included in the overall cost of advice and so will not incur an unauthorised payment charge, under adviser-charging; although uncertainty still remains over how consultancy-charging, which is not specifically mentioned in the guidelines, will be applied for group schemes.
Along with shifting their stance, HMRC’s rewrite of the guidelines has also created a distinction between an adviser charge relating to lifetime annuity advice and a charge relating to “wider pensions advice”, such as drawdown.
As part of the new proposed rules, a quarter of the costs relating to wider pensions advice would be taken from the client’s tax-free cash while any costs for advice on the lifetime annuity would only be taken from the member’s remaining fund.
Following the rewrite of the guidelines, a HMRC spokesman said: “The draft guidance was sent to the ABI for review and we are currently considering its comments.
“We are expecting to make some changes to the draft guidance as a result of the helpful feedback we have received.
“HMRC will consider as a separate matter whether guidance is needed about commercial payments for consultancy- charging by a non-occupational scheme not normally being regarded as unauthorised payments made to or in respect of the member.”
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