Gordon Brown has proposed to apply shareholder tax rates to with-profits life funds. This could mean that returns on these policies could be taxed up to 3 times as much, which will significantly reduce income.
Legal & General estimate that this will cost policyholders £150 million. A second tax rise, due to take place in 2005, will reduce value in the non-profit part of the funds. This is likely to cost £300million in embedded value.
Our view
You elected him.