This edition of the week in news will be delivered to you by a mysterious man in military fatigues.
But don’t worry: the staff of FTAdviser are safe and well. There has definitely not been a coup. Absolutely not…
1) He’s making a list, he’s checking it twice
It’s that time of year when we all wonder what presents we will be given by an elderly gentleman.
I’m not talking about the one who breaks into your house in December wearing red, but Philip Hammond, the one who breaks into your wallet every few months.
This meant that this week we have been bombarded with predictions and suggestions about what the Chancellor of the Exchequer will announce this week.
For example the Centre for Economics and Business Research said scrapping stamp duty could ease the UK’s housing crisis by removing a barrier to development.
Meanwhile the annual allowance might be subject to changes as Mr Hammond looks for places to raise money, it has been predicted.
A group of experts has said the government needs to reform pension tax relief to encourage saving.
2) It never rains but it pours
This week beleaguered star fund manager found out that Aviva was dropping his Equity Income fund in a move which affects £30m of capital.
Last month it was revealed Jupiter, a long-term back of Mr Woodford, had disinvested entirely from his flagship fund.
Mr Woodford’s fund has significantly underperformed its sector over the past 12 months, returning 0.4 per cent compared to the 12.6 per cent returned by the IA UK Equity Income sector.
3) Taxing week for lawyers
It’s been a bumper week for HM Revenue & Customs, which has managed to see justice served twice for those seeking to dodge their bills.
In the first instance, the Supreme Court ruled against users of a failed tax avoidance film partnership scheme, which tried to use legitimate investment in the film industry as a hook for tax avoidance.
HMRC defeated the avoidance scheme, in a claim brought by Jorge Manuel De Silva and Bernard Alec Dokelman, in court, but the pair argued on a technicality that the tax office could not overturn their loss relief claims.
But the Supreme Court disagreed - ruling in favour of HMRC and ensuring these taxpayers, and others waiting for this ruling, will have to pay their tax which could amount to £1bn extra for the nation’s coffers.
Meanwhile five men were jailed at Southwark Crown Court for their role in an attempt to commit a £100m tax fraud.
A total of 730 investors joined the scheme, tempted by an offer of an immediate large return - a £20,000 investment would result in a successful claim for £32,000 in tax relief.
The scheme attempted to deceive HMRC into believing that the overall enterprise was much larger than it was, and into granting tax relief that was not due.
4) Rules are for losers
It wouldn’t be the week in news without some passing reference to the Financial Conduct Authority.
And this week the FCA has been accused of acting against its own stated competition aim by bringing in new rules that could see smaller funds forced to close even if they perform well.
If implemented the recommendations from the FCA's Asset Management Market Study could cause some funds to fold and restrict new entrants into the market, several fund managers have warned.
This would seemingly run contrary to the FCA's role to promote effective competition in the financial sector in the interests of consumers.
In response the FCA said it is currently assessing the feedback it got from its consultation on this subject.
5) Dodgy advisers see pensions are a ‘steel’
Meanwhile the FCA has also expressed concern about the advice being given on defined benefit (DB) transfers out of the British Steel Pension Scheme (BSPS).
The regulator has an ongoing programme of "visiting advisers in the Swansea area and Port Talbot area, reminding them that there are requirements” when advising clients to transfer their pension pots, Christopher Woolard, the FCA’s director of strategy and competition, said.
Last week, Henry Tapper, pensions expert and founder of Pension Playpen, warned that there is little evidence of financial advisers suggesting anything other than transfers to these members, after spending a day speaking to these individuals in Port Talbot.
Around 130,000 individuals will have to choose to move their pension pots to a new plan being created, BSPS II, or stay in the current fund, which will be moved to the Pension Protection Fund (PPF).
damian.fantato@ft.com
