HMRC clarifies rebate tax position after provider demands

HM Revenue & Customs (HMRC) has issued a number of clarifications on the updated tax rebate position following requests from providers.

Among the confirmations is that trail commission received by advisers will not be subject to income tax unless a proportion is passed onto consumers. In a statement, HMRC said: "Where a fund manager pays a financial intermediary amounts such as a percentage of their AMC or annual commission payable for the retention of an investment in a fund the payment will be trading income of the financial intermediary and as set out above will not be taxable as an annual payment." Rebates paid to consumers became subject to income tax from April after HMRC ruled the payments made to investors are...