Please Help; IFA mistake results in huge tax bill pending
Discussion
Hi All, I have a major problem, and would appreciate some input.
A substantial withdrawal from an off-shore policy was done on the basis of a single withdrawal, rather than a segment surrender. The result is a tax bill of over £70,000 as opposed to £2,400. The authority to do the single withdrawal was given to the off-shore company by an admin clerk at my IFA without reference to the principle, let alone myself (he has now left to become a holiday rep..). The company took his fax telling them to proceed as sufficient authority, no-one else at the IFA was aware he had done this. Any advice would be appreciated. (All the money placed off-shore had already had UK tax paid upon it, for anyone who may regard this as a tax dodge that went wrong. It was done for higher interest rates but fortunately it didn't go to Iceland!). Thanks in advance.
A substantial withdrawal from an off-shore policy was done on the basis of a single withdrawal, rather than a segment surrender. The result is a tax bill of over £70,000 as opposed to £2,400. The authority to do the single withdrawal was given to the off-shore company by an admin clerk at my IFA without reference to the principle, let alone myself (he has now left to become a holiday rep..). The company took his fax telling them to proceed as sufficient authority, no-one else at the IFA was aware he had done this. Any advice would be appreciated. (All the money placed off-shore had already had UK tax paid upon it, for anyone who may regard this as a tax dodge that went wrong. It was done for higher interest rates but fortunately it didn't go to Iceland!). Thanks in advance.
Sounds serious. I reckon the transaction is a fait accompli and cannot be reversed - therefore the tax will be payable.
The course of action I would take would be to sue the finance entity for carying out a transaction that wasn't authorised . Obviously, you will need to check out the terms and conditions of the agreement you had with the IFA to see if the transaction really was unauthorised (there might have been a clause in the small print allowing them to do things without express authority from you - as happens with managed funds, for instance). I think a good legal advisor is a must for this.
The course of action I would take would be to sue the finance entity for carying out a transaction that wasn't authorised . Obviously, you will need to check out the terms and conditions of the agreement you had with the IFA to see if the transaction really was unauthorised (there might have been a clause in the small print allowing them to do things without express authority from you - as happens with managed funds, for instance). I think a good legal advisor is a must for this.
Wot Eric sed.
Sounds like the IFA company was nelgigent. Dig out your terms and conditions and READ THEM.
Look especially for a clause called "Limitation of Liability" to see how much is the maximum you can sue them for for negligence. I hope it isn't £1000 for your sake.
Then go and see a GOOD PROFESSIONAL NEGLIGENCE solicitor.
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