SMI to apply withdrawal charge

MVRs to be applied to withdrawals over 2.5% of original investment from with-profits fund

Closed life office Scottish Mutual International, a subsidiary of Abbey, is applying market value reductions (MVRs) to regular withdrawals from its SMI Dublin With-Profits fund. The MVR is applied to any withdrawals above the annual MVR Free Allowance, currently the same as the annual bonus rate of 2.5%. This means a 5% annual withdrawal, though free from an immediate income tax liability, would suffer an MVR on 50% of the assets. Karen Plumb of Plumb Financial Services in Suffolk said: "Not only is an investor's capital locked in to SMI's With-Profits fund due to high MVRs, but the inves...