James Hay sounds trail commission tax warning

Jenna Towler
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Advisers and clients could get "caught out" by the new tax treatment of payment of trail commission, according to James Hay Partnership.

The provider said closer inspection of draft guidance and a technical note for tax professionals revealed that if the rebate agreement is between the adviser and the client, then the adviser is responsible for deducting the tax and the reporting - not the platform or provider. Neil MacGillivray, head of technical support unit, James Hay Partnership said: "There is no doubt the FSA consultative paper CP12/12 has been the catalyst for this change in stance by HMRC. The potential outcome is likely to be a quick rethink by many providers and a speedy move to clean funds for all wrappers. ...

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