Thousands of investors at collapsed financial company Keydata could be handed
large tax bills despite believing their money was tied up in tax free accounts
The revelation came to light as administrators PricewaterhouseCoopers, who
have been working closely with HM Revenue & Customs, found that these
investments should have been subject to income tax.
Those who could be handed the tax bill are customers which invested in tax
exempt ISAs. However PwC has discovered Keydata did not comply with ISA
regulation and therefore they were not exempt.
There are up to 20 Keydata or Lifemark products which were non-compliant and
were originally sold for fives years.
A further blow means investors could also be forced to pay thousands of
pounds in backdated tax for the lifecycle of the investment.
HMRC would not comment as to whether or not this would be the case.
It is presumed the majority of investors are elderly savers attracted to the
tax free savings. Most are hoping for a payout from the Financial Services
Keydata, which sold and managed over £3bn of financial products, was placed
in administration in June this year. It was found to have run investment
products which did not comply with regulations in turn racking up a £5m unpaid
PwC made the warning that investors who receive money from the administrators
may have to declare them on a tax return.
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