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Consultation on replacement for 5% allowance comes to an end

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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Canada Life Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.

Canada Life International Limited and CLI Institutional Limited are Isle of Man registered companies authorised and regulated by the Isle of Man Financial Services Authority.

Canada Life International Assurance (Ireland) DAC is authorised and regulated by the Central Bank of Ireland.

Stonehaven UK Limited and MGM Advantage Life Limited, trading as Canada Life, are subsidiaries of The Canada Life Group (U.K.) Limited. Stonehaven UK Ltd is authorised and regulated by the Financial Conduct Authority. MGM Advantage Life Limited is authorised and regulated by the Financial Conduct Authority.