HMRC issues new rebate tax guidance after raft of enquiries

HM Revenue and Customs has issued fresh guidance on its decision to tax unit rebates after receiving a number of queries from fund groups and platforms.

In March 2013 HMRC announced that as well as banning cash rebates, unit rebates paid from fund groups to clients would be taxed at the basic rate, with higher-rate taxpayers having to self-assess. The unit rebate model remains a part of platform propositions from the likes of Skandia and Hargreaves Lansdown, and the latter has mounted a legal challenge to HMRC's tax. In the new guidance, HMRC said the ban would only apply to payments made to consumers, not from fund groups to advisers. Payments from intermediaries to clients used to offset an advice fee will be taxable, but not whe...