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Offshore bonds and 5% tax deferred allowance

richallumrichallum Administrator
in Technical stuff

For post RDR bonds, which of the following would you say count towards the 5% allowance?

  1. withdrawals
  2. advice fees
  3. bond product / platform fees
  4. DFM fees

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Comments

  • benjaminfabibenjaminfabi Moderator
    1. Yes if partial
    2. Yes always
    3. No never
    4. Depends
    Benjamin Fabi 
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  • richallumrichallum Administrator

    Thanks @benjaminfabi can you expand on 4. Depends?

    Paraplanner. F1, Apple, Nutella, ice cream. No trite motivational quotes. Turning a bit northern. 

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  • benjaminfabibenjaminfabi Moderator

    Depends on whether the bond provider is willing to classify the DIM fees as investment management fees, which are not treated as withdrawals because they're not advice fees.

    I'm pretty sure Utmost will allow part of an adviser's OAC to be set against investment management if they're running an advisory MPS.

    It's a weird quirk, but it is there.

    Benjamin Fabi 
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  • richallumrichallum Administrator

    Thanks. I'd go with 1, 2 always and 4 in rare cases but normal DIM not.

    Paraplanner. F1, Apple, Nutella, ice cream. No trite motivational quotes. Turning a bit northern. 

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  • benjaminfabibenjaminfabi Moderator

    I'd leave it to the bond administrator to tell you how they do it as it's their decision and their obligation to report the chargeable event to the client.

    Challenge them if you don't think they're doing it correctly, but if they don't agree, give the client inaccurate information, and a tax liability is later uncovered, they'll be liable.

    Benjamin Fabi 
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