Charlene Young: Compensation rule flaws add insult to injury

A lack of consistency in the tax rules for compensation payments, and the way HM Revenue & Customs (HMRC) guidance is applied, is creating more problems for investors who have already suffered a financial loss. It needs clarification and simplification - and here's why… 1) Inconsistency across tax wrappers Compensation relating to investments held within a stocks and shares ISA can be paid into the ISA as a defaulted investment subscription. This means that the payment will not use any of the investor's annual ISA allowance. Compensation paid in relation to a service or advice th...