Standard Life has said that it will pay the 2013 tax liability that customers investing through its platforms will incur following the advice from HM Revenue & Customs (HMRC) that the ‘cashbacks’ they have been receiving on their fund charges should be taxed.
The move sees Standard pay all liabilities for the rest of the year relating to rebates on both Standard Life Wrap and FundZone.
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The one-off settlement will be paid directly to HMRC to cover clients’ basic, higher and additional rate tax liability to the end of this year.
Standard Life also revealed that it is working to remove the rebate mechanism from its pricing structure by the end of 2013 by converting all funds on its platform to low-cost rebate-free funds.
David Tiller, head of platform propositions at Standard Life, commented: "By taking this action now, we’re giving advisers more time to convert their clients’ funds to rebate-free share classes, which eliminates any potential tax liability in the future."
"This will ensure no Standard Life customer on our platforms will have to pay additional rebate tax. We believe that this is the right thing to do for our customers," he added.
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