The payment will cover all Standard Life Wrap and FundZone clients’ basic, higher and additional rate tax liability to the end of the year, and will be made directly to HMRC so the client does not have to include the income in tax returns.
Advisers are not required to inform Standard Life of individual clients’ tax positions. The settlement is treated as a gift for tax purposes, so there are no further tax implications for the client.
The move enables the firm to move all clients to clean and super-clean share classes and eliminates potential rebate tax liabiities in the future. It revealed in April that it would be moving to a clean share class-only model as of the beginning of the 2014/15 tax year following HMRC’s announcement that rebates would be subject to income tax.
A spokesperson for the firm said funds representing 90% of platform assets already have clean share classes, and the remaining funds will be uploaded by the end of the year.
David Tiller, Standard Life Head of Platform Propositions, commented: “We disagree with HMRC’s analysis of the relevant legislation and believe customers and advisers should have been given time to make alternative arrangements. We have decided that, if HMRC’s view stands, we will pay this year’s mutual fund rebate income tax liability on behalf of all advisers’ clients on our platforms.
