"For offshore bonds held with Old Mutual International, we will calculate and pay any tax due through corporation tax at the current rate of 19 per cent (this will reduce to 17 per cent from 1 April 2020). The tax paid will then be passed on to policyholders as a policy charge in accordance with their policy terms.
"Unfortunately, policyholders cannot offset this policy charge against any tax they may owe when calculating the gain on their policy. This will essentially result in double taxation, leading to an unfavourable tax position for clients.”
Old Mutual also highlighted that the extra tax charge could dampen the return from the investments, and so, make them less attractive to investors.
david.thorpe@ft.com
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