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Court battles and tax bills: the week in news

Court battles and tax bills: the week in news

The past seven days have seen a handful of MPs turn their backs on the two main political parties.

But luckily we're still here to keep you updated with what has happened in the world of advice. It’s time for the week in news.

1) Tough day in court for HMRC

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HM Revenue & Customs lost a court case regarding the lifetime allowance fixed protection, which could lead to new claims.

The case centred on Gary Hymanson’s claim that he had accidentally failed to cancel a direct debit to his pension scheme which, HMRC argued, should void his £1.8m lifetime allowance fixed protection.

The First-Tier Tribunal found the taxman’s decision to revoke Mr Hymanson’s fixed protection was unreasonable, and directed that it be reinstated.

The lifetime allowance – the limit on the amount of money that can be saved in a pension without triggering a tax charge - currently stands at £1.03m.

2) Slim pickings for pension trustees

Pension scheme trustees and employers have revealed they are refusing to appoint financial advice firms who get paid through contingent charging.

Consultancy firms LCP and Willis Towers Watson, which help trustees and companies, told FTAdviser that due to this restriction, plus the need to be able to process a large volume of cases, there are less than 10 firms in the country suited to be hired by pension schemes.

Stewart Patterson, director of retirement at Willis Towers Watson, said: "I haven't seen any pension schemes or employers initiated exercises go anywhere near contingent charging. It doesn't even pass the sniff test.

"None of the firms that we put in front of our clients would be offering those sorts of fees."

3) Bills, bills and more bills

About 100,000 savers could face a six-figure tax bill if they have contracted out benefits and their defined benefit scheme opts to convert them.

The issue stems from the Lloyds case in October when the High Court ruled that trustees of the bank’s pension scheme must equalise benefits between women and men who have guaranteed minimum pensions because of contracted out benefits.

The ruling was considered a solution for a pension problem spanning almost three decades, and DB schemes are now having to decide how to equalise the contracted out benefits of their members.

According to a freedom of information request from Royal London, more than 100,000 people have secured fixed protection against past cuts in the lifetime allowance for tax relief purposes.

4) A done deal

Quilter has bought financial planning firm Charles Derby in a deal set to quadruple the number of advisers in its national advice business. 

The acquisition will see 200 advisers join Quilter over the course of 2019, adding to the 65 currently in its national advice arm. 

Charles Derby is an existing member of Quilter's advice network, Intrinsic, a status expected to minimise disruption for its clients and advisers.