Skandia is urging the FSA and HMRC to clarify the position with regards to fees for financial advice that are deducted from a pension contract.
In response to the Retail Distribution Review (RDR), Skandia says that any fees for financial advice that are deducted from a pension contract should be allowed without resulting in any tax consequences. It also states that Customer Agreed Remuneration (CAR) could result in an "unauthorised payment" if it is applied to a pensions contract. Under a CAR arrangement, the customer has to specifically agree the amount payable for financial advice and 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. ...
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