Skandia is to add clean share classes to its UK platform following HM Revenue & Customs' decision that rebates to customers are taxable.
Skandia is to add clean share classes to its UK platform following HM Revenue & Customs’ decision that rebates to customers are taxable.
The platform will continue to pay a unit rebate “where possible” following the introduction of the new share classes, in a bid to maintain current prices and minimise tax liabilities for customers.
The move follows Standard Life’s decision, revealed by Investment Week yesterday, to move to a clean share class model and scrap rebates by April 2014.
Skandia, however, said its own introduction of clean share classes will act as a “complement” to its existing unbundled unit rebate model.
“This development will enable advisers and their clients to select the share class most appropriate to their individual circumstances, including their tax status,” Skandia said in a statement.
The platform said it will continue to work with fund groups to ensure customers “always receive the best terms currently available”, either through a combination of clean share classes with unit rebates or through new preferentially-priced versions.
Skandia added its unbundled pricing structure announced last December was designed to accommodate the rebate tax announced last month.
Its Select range – which offers clean share classes with no rebate – will not be affected by HMRC’s decision. HMRC is responsible for fiscal revenue in the UK.
"We will continue to seek the best terms in the market to maintain our competitive net fund prices,” said Skandia UK managing director Peter Mann (pictured).
“Whilst new share classes with lower AMCs specific to our platform are an option, it has become evident that the quickest way to negate the effect of tax on rebates for our customers is to move to clean share classes that are already available and to continue to pay a unit rebate to customers, albeit at a lower level, to maintain the beneficial terms we offer to customers."
This article was first published on Investment Week