Fidelity warns over cash rebate ban loophole

Platforms attempting to dodge the cash rebate ban by paying consumers units in a cash fund would be acting in an 'incredibly foolish' manner and going against the spirit of the rules, Fidelity has warned.

The regulator has already banned cash rebates from April this year, although it allowed unit rebates to continue - albeit now with an additional tax levied by HMRC. Yesterday the Financial Conduct Authority (FCA) provided further details on how platforms can pay rebates to consumers, following calls for clarity from the Tax Incentivised Savings Association (Tisa). The FCA confirmed that unit rebates do not have to be paid in to the same fund that the rebate originated from. "The rules do not require rebates to be paid into the same fund, but the rebate has to be paid in units," a s...