The Government has removed certain tax clauses from the Finance Bill, due to pressure from the Association of British Insurers, but insist that the measures will be re-introduced after the election.
The ABI say that the clauses left out of the Bill to ensure a smooth passage through Parliament, would have led to unnecessary tax rises for insurance companies policyholders. The clauses would allow income and gains from surplus life funds to be taxed at shareholder rates.
Our view
This is great news. Whilst for most they would have been sigificant, for many it would have made a real difference to returns.