CAR conflict for pension contracts - Skandia

As a result, the group is urging the FSA and HMRC to clarify their position on fees for financial advice deducted from a pension contract which it says should be allowed without resulting in any tax consequences. Under a CAR arrangement (a method supported by the RDR) the customer has to specifically agree the amount payable for financial advice. If this payment is deducted from a pension contract it could be classed as an unauthorised payment and hence a tax penalty could be applied. This is because the customer has explicitly agreed the payment for advice rather than it simply being a...