The Treasury confirmed yesterday its intention to press ahead with unfair proposals to tax the funds supporting customers’ with-profit savings policies, originally announced in the December pre-Budget statement.
The Treasury confirmed yesterday its intention to press ahead with unfair proposals to tax the funds supporting customers’ with-profit savings policies, originally announced in the December pre-Budget statement.
Norwich Union still fundamentally opposes the proposals which when implemented will lead to an increase in the tax burden on the free reserves supporting with-profits policyholders’ funds.
One of the Chancellor’s themes from the Budget was about encouraging savings and restoring trust and confidence – this tax proposal is inconsistent with this.
Norwich Union is also concerned about the way these changes are being introduced - through secondary rather than primary legislation. In effect secondary legislation enables the Treasury to implement new tax laws in this area, bypassing the normal Parliamentary review process.
Gary Withers, chief executive of Norwich Union Life, said: "As we said to the Treasury in December, this is simply a piggy bank raid on the funds that support our customers’ savings policies.
"One of the most effective ways to destroy confidence in savings is to introduce arbitrary tax raids on savings vehicles. We will continue to oppose this stealth tax in the interests of protecting our customers. I would again urge the Treasury to review their proposals in order to promote confidence in long term savings."
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Notes to editors:
- Norwich Union is the UK's largest insurer. It is the UK's largest provider of life, pensions and investment products and one of the leading IFA providers. IFAs provide around 75% of the company's long-term savings business in the UK.
- Norwich Union has strategic alliances with building societies and other leading UK brand names including Tesco Personal Finance and The Royal Bank of Scotland Group. Norwich Union’s news releases and a selection of images are available from Aviva's internet press centre at www.aviva.com/media.