HMRC to rethink stance on ISA rebates after RDR

  • Print
  • Comments (1)

HM Revenue & Customs (HMRC) is redrafting its guidance on the tax treatment of ISAs following the retail distribution review (RDR), it has emerged.

Last week, HMRC published its latest ISA bulletin, which sets out the treatment of adviser commission rebated back to ISA customers post-RDR.

It says if a rebate is paid in additional units invested in the ISA, this will not count as a new subscription and therefore will not count towards annual ISA subscription limits.

Where commission is rebated back to the client’s non-ISA cash account and then invested into the ISA, this will count as a new subscription.

But the bulletin also says: “Where an adviser chooses to give up trail commission he has earned for pre-RDR advice so that he can have a single remuneration agreement with the customer, the payment is from the adviser to the customer, so this would count as a new ISA subscription and would count towards the annual ISA subscription limits.”

When asked by Money Marketing, Fundweb’s sister publication, to clarify the statement, HMRC could not provide an explanation of how giving up trail commission would result in money being rebated to the client.

Money Marketing understands HMRC is now revising the text. HMRC declined to comment.

  • Print
  • Comments (1)

Daily Email Updates

If you enjoyed this article, sign up to receive the latest breaking news and analysis for your industry from Fund Web.

Money Marketing Awards 2015

Put your firm forward as the leading practitioner in your field. Adviser and Advertising categories are open to entries - Enter Now.

Readers' comments (1)

  • Well, there you have it! Neither the FSA nor HMRC get it - a rebate of the client's subscription is to be treated as a new subscription? Why? It's only a discount and discounts are better than no discounts - ask any client! What can we do about such idiotic decisions? They would obviously like us to just give up...

    Unsuitable or offensive? Report this comment

Have your say Edit my profile/screen name

You must sign in to make a comment


Fund Data


Will the oil price rise above $50 a barrel this year?