Charlene Young: Compensation rule flaws add insult to injury

Three examples of compensation rule issues

clock • 3 min read

Charlene Young lists three examples where tax rules on compensation payments are being applied inconsistently - which results in investors who have already suffered a loss being further penalised...

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...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Regulation

FCA to launch multi-firm review looking at bereavement processes

FCA to launch multi-firm review looking at bereavement processes

Follows customer vulnerability work

Sophia Panayi
clock 07 May 2026 • 2 min read
FCA wholesale markets priorities: What they mean across UK financial services

FCA wholesale markets priorities: What they mean across UK financial services

Higher expectations on how firms evidence governance, risk and compliance

Chris Davies
clock 06 May 2026 • 4 min read
Regulator launches review of poor claims management practices

Regulator launches review of poor claims management practices

Investigation into CMCs and law firms

Jenna Brown
clock 06 May 2026 • 3 min read