TISA seeks tax-free transfers to help resolve investment bond concerns
The Chancellor’s announcement on proposed CGT changes in the PBR significantly changed the attractiveness and possibly the suitability of Single-Premium Investment Bonds for current and future trends. While TISA has played an active role in facilitating dialogue and fostering a better understanding in all quarters about how the changes might impact the market, TISA believes that there is an altogether better way forward.
Ahead of the 2008 Budget, TISA has written to ask that the Treasury consider changing the rules on investment bond transfers. Under the TISA proposals, individuals could switch between investment bonds and/or providers without triggering a taxable event.
Tax-free transfers would also bring this wrapper into line with most other tax-incentivised schemes, such as pensions, ISAs and Child Trust Funds. Transfers would promote competition in the marketplace and allow consumers to choose the best product and investments for them as their needs and appetite change or as the market develops.
While most of the industry is focused solely on taxation and attractiveness as compared with other forms of collective investments, TISA believes its changes would make a greater impact given the long-term nature of single-premium investment bond holdings. TISA believes that Single Premium Investment Bonds still have a place for many as a part of their wider financial planning.
TISA Director General Tony Vine-Lott said,‘TISA believes that Single Premium Investment Bonds are a useful tool as part of many consumers’ long-term savings and retirement needs. We believe that enabling bonds to be transferred tax-free in the same way as other major savings schemes would further enhance the attractiveness and suitability of this market, while giving consumers the confidence that they can always choose the best option for their needs.’
NOTES TO EDITORS:TISA is the trade association for the retail financial services sector. TISA works to improve tax incentivised savings schemes and promotion of savings in the UK. TISA works closely with industry, parliamentarians, HM Treasury, HM Revenue & Customs and the Financial Services Authority to enhance and improve the range, features, benefits, promotion and quality of savings schemes available to all savers in the UK. These include Individual Savings Accounts, Child Trust Funds, personal pensions, employer-based schemes, and other consumer-centric, Government savings schemes and savings initiatives.
For more information, please contact:
Jacob Coy, Cicero Consulting +44 7900 392 531 or jacob.coy@cicero-europe.com