INDEPENDENT FINANCIAL ADVISERS have welcomed a promise from the taxman to clarify the tax treatment of adviser charges.
HM Revenue & Customs told IFAs in an open letter that it was reviewing guidance on VAT and the registered pension schemes manual, as well as technical advice on capital gains tax relating to acquisition costs and adviser fees. HMRC issued this in advance of the transition to the Retail Distribution Review in 2013, a new regulation framework to be implemented by the Financial Services Authority.
Aidan Reilly, policy adviser at HMRC, wrote in the letter: “Ministers understand that many advisers and the wider industry are keen to develop systems and appropriate business models ahead of the deadline for RDR changes.
“We have identified some areas where further clarity would be helpful for the industry in preparing for the transition. We are exploring the options around updating HMRC’s technical guidance.
Philip Milton, managing director Philip J Milton & Company, told FT Adviser that the letter was helpful and HMRC should also consider making fund management fees exempt from VAT.
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