Following some high-profile cases where very large, artificial gains had been triggered by excess partial withdrawals from investment bonds, HMRC issued a consultation document on 20 April. This included three suggestions to replace the current 5% tax-deferred allowance. The consultation came to an end on 13 July.
Canada Life has submitted a response to the consultation. Of the three alternatives for the replacement for the 5% allowance, we have suggested that the 100% allowance is by far the simplest to administer, understand and explain to clients.
The government response to the consultation is expected to be published around the beginning of October with the intention of including legislation for the preferred option in the Finance Bill 2017.
These are exciting developments for the financial services industry and we await further details with interest. Watch this space for additional news. In the meantime, if you need any more detail, please contact the ican team.
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