HMRC sets eyes on discount brokers

HM Revenue & Customs (HMRC) is expected to extend its tax on rebates to some discount brokers, even on funds held inside an ISA.

The revenue's decision last month to apply income tax on unit and cash rebates paid through the general investment account, excluded investments held in other tax wrappers, including self-invested personal pensions (SIPPs) and ISAs. However, it is understood HMRC is set to release further guidance on taxing rebates paid into ISAs, after a number of queries from discount brokers. In the updated guidance, cash rebates paid by the ISA manager - typically a fund manager or platforms - to a discount broker and then on to client will also be subject to income tax, even if the discount broke...