Skandia is re-evaluating its approach in the wake of the HM Revenue & Customs announcement that all rebates will be subject to income tax.
Yesterday HMRC revealed investors should pay income tax on any cash rebates or fund units they receive as rebates.
In response to the ruling, Alliance Trust managing director Patrick Mill said this could be the “final nail in the coffin for unit rebates”.
Peter Mann, UK managing director at notoriously pro-unit rebate adviser platform Skandia, said the company will re-evaluate its approach following the ruling.
He said: “The announcement by HMRC today to start collecting income tax on rebates will impact investors trying to maximise their savings because it could increase the cost of investing, particularly outside of tax wrappers.
“We have a number of options open to us and we are now evaluating which will deliver the best outcome to advisers and customers.
“We could move to cleaner share classes, such as 75bps for equity funds, and still rebate from there because a rebate on a lower share class even with tax will still result in a better net position for the client. Alternatively we could look to provide access to more preferential share classes that do not pay a rebate but still reflect our scale.
“Our priority will always be to offer the best possible total cost of ownership to advisers and customers.”
