FCA on naughty step and calls for IHT reform: week in news

FCA on naughty step and calls for IHT reform: week in news

After more than three years of deliberation the country reached the final countdown of its departure from the European Union this week, with Brexit officially commencing at 11pm tonight (January 31). 

It was also a significant week for Woodford investors as they reached some resolution and the Financial Conduct Authority found itself on the naughty step with a £2,000 fine. 

It's time for the week in news. 

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1 Woodford investors learn of their losses 

Another chapter of the Woodford saga unfolded this week (January 28) as investors learned they would receive about 50p per share on the majority of their investment.

Those trapped in Neil Woodford’s flagship Equity Income fund were told they would receive between 46.3p and 58.9p per share, depending on who was involved in the fund’s distribution and whether the investor was in accumulation or receiving an income from their investment.

Investors have been unable to withdraw their cash from the fund since it was suspended on June 3 last year but they should have received their first payment yesterday (January 30). 

2 FCA receives £2,000 fine 

The FCA was left red-faced when it landed a £2,000 fine from The Pensions Regulator after failing to provide enough detail in its defined contribution scheme documentation.

The amount was the highest penalty the pensions watchdog could give to a pension scheme for failing to comply with the so-called chair's statement.

The City watchdog was forced to apologise to members of the plan and said it would review its systems to ensure it does not make the same mistake again.

3 MPs back radical IHT reform 

The inheritance tax system faced a major shake up on Wednesday (January 29) as MPs called for a radical changes to the rules

An all party parliamentary group report suggested the current "unfair" rate of 40 per cent be cut down to 10 per cent and most reliefs scrapped. 

The MPs branded the current system "complex, ineffective, riddled with anomalies, distortionary and unfair" and John Stevenson MP, who headed up the campaign, said the way the tax was levied led to a "strong sense of injustice". 

4 Underperforming Invesco trust faces closure 

This week signalled impending curtains for the Invesco Income Growth trust, which sharply underperformed the AIC UK Equity Income sector over the past five years, returning 24 per cent, compared with 35 per cent for the average trust in the sector. 

Investors in the £200m UK equity trust run by Invesco will have the opportunity to force the company to wind up in a vote.

In a stock market announcement this week (January 27) the board revealed shareholders will be asked to vote at the trust's next AGM in September. 

5 Thousands turn back on state pension 

On Monday (January 27) Canada Life revealed thousands of savers had turned their backs on the state pension and opted to stop receiving this benefit, most likely to manage their tax bills.

A Freedom of Information request from the provider showed in the 2018/19 tax year, 14,300 people halted their state pension payments while 1,500 people decided to re-start payments.