Standard Life has pledged to pay the tax liabilities from open-ended fund rebates for clients on its wrap platform until the end of the year.
The wrap has said it will pay the tax, announced by HM Revenue & Customs (HMRC) just weeks before the start of the most recent tax year, directly to the taxman so clients will not have to include it on their tax returns.
Standard Life has previously announced that it wants to move to a completely rebate-free pricing structure from the beginning of the next tax year.
David Tiller, Standard Life head of platform propositions at Standard Life, said the firm had made its commitment because it disagreed with HMRC bringing in the tax without enough time to make other arrangements.
He said advisers on Standard Life now had “until the end of the year to move clients to clean and super clean share classes, eliminating any potential rebate tax liability in the future”.
In a further statement, the group added that there “seems to have been some misunderstanding as to how we are funding our customers’ rebate tax liability”.
“This is a one-off settlement agreed in writing with HMRC to cover clients’ basic, higher and additional rate tax liability to the end of this year,” it said.
“This settlement does not create any further tax liability for clients and we do not require advisers to inform us of individual clients’ tax positions.
“The settlement is treated as a ‘gift’ for tax purposes, which means that there are no further tax implications as a result of our decision to settle the tax on clients’ behalf.”
