17 May 2007
Mike Morrison, Pension Strategy Manager, Winterthur uncovers more issues surrounding the future of ASP following the Budget tax announcements at the latest series of Winterthur national roadshows, titled ‘A Wealth of High Net Worth Expertise’.
“ASP still offers considerable scope for financial planning,” Mike Morrison commented during the final date of the Winterthur roadshow in London’s Hilton Tower Bridge today. “With such a large tax charge on second death, our view is that it makes sense to minimise the amount that could be taxed. This could mean using other more tax efficient investment vehicles for any excess income or even third party pension contributions.
“However there are still some serious issues under the surface, which arise in relation to making ASP an unauthorised payment. Under the existing legislation the unauthorised payments charge and surcharge have to be paid by the beneficiary not the scheme. We therefore have the ridiculous situation of a beneficiary having to find the tax to enable receipt of any payment into their scheme. Secondly, legislation on unauthorised payments penalise schemes that pay out such payments with a possible deregistration charge.
He continues: “Although many have focussed on a headline tax of 70 or 82% which implies a return of the rest, it is actually unlikely to be a realistic option as schemes will not want to trigger a further charge and risk being deregistered.
“The only real option for keeping the surplus tax free is to pay it to a charity. I am very supportive of charitable giving, however it does not seem right that people are forced to give money to charity to avoid tax and ultimately I believe it should be a matter of choice.”
-End-
For further information:
Paul Riddell Winterthur Life, Press Office +44 (0)1256 798099
Christine Wood FD +44 (0)20 7269 7253
Notes to Editors
About Winterthur Life UK Limited
Winterthur Life UK Limited is part of AXA Group, one of the largest financial institutions in the world.
Winterthur Life UK Limited is a provider of focused investment and retirement solutions and support services predominantly distributed through quality IFAs to their high net worth clients.
The company is recognised as having an innovative approach to financial products and its products feature simple, transparent charging with access to a wide range of carefully selected investment funds and fund managers via its Tailored Selection fund platform. Winterthur is also differentiated in the market through its focus on service excellence.
Winterthur Life UK Limited has a B+ financial strength rating from AKG, which denotes “very good financial strength”. At the end of 2006 Winterthur had assets under management exceeding £10 billion, and grew its new pensions business by 125% to £1.45 billion.
www.winterthur-life.co.uk
