Scottish Equitable has not linked its multi-manager offering to its onshore life product range,...
Scottish Equitable has not linked its multi-manager offering to its onshore life product range, saying to do so would lead to a tax drag on the portfolio's performance.
The group has links to two Dublin-based Oeic funds run by Northern Trust, available via its pension and offshore life links where the tax issue does not apply.
The problem arises because for life links, the UK dividend stream from the portfolios is treated as an overseas income stream in Dublin, leading to the levy of a 20% tax charge on it.
As the Northern Trust funds, Stockmarket and Balanced, typically have at least 50% invested in UK equities, Scottish Equitable believes this would create a potentially significant diminution of performance if the funds were offered via the onshore life links.
Mark Pearson, head of investment marketing & fund development at Scottish Equitable, said: 'In today's markets, with single-digit returns, that sort of drag would not benefit our clients.'
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