Questions of Cash: Ombudsman offers hope for mis-sell claim


I read your advice to JB, Folkestone (see top related link) on a mis-sold endowment policy.

Q. I read your advice to JB, Folkestone (see top related link) on a mis-sold endowment policy. I had a similar claim over a Royal & SunAlliance endowment policy - I was not told it was share-based and risky. RSA says there is a 15-year limit on claims and, as my policy was taken out in June 1988, any claim for mis-selling expired in June 2003. But I only became aware of the likely shortfall when the policy was reviewed last year. What is this 15-year rule?
NH, Sussex.

A. RSA is relying on an interpretation of the statute of limitations, which provides a 15-year limit on legal action from the date of a contract. RSA started applying the 15-year rule in May last year. "We must be fair to all our policyholders and ensure that we do not pay out compensation where legally we are not obliged to do so because this would diminish the fund available to benefit other policyholders," says RSA's spokesman, Rob Skinner. The Financial Ombudsman Service (FOS) does not accept this view of the law and says it can determine cases referred to it pre-dating the 15 years. The FOS applies time limits of six years from the date of contract, or three years from the date a person became aware or should have been aware of the consequences - on which basis you are in time.

The RSA spokesman says: "We recognise the limitations issue is a point of contention and are in discussions with the Financial Services Authority (FSA) and FOS about it." But David Creswell, a spokesman for FOS, says: "We don't think we are in discussion. We make decisions. Our rules do not have a 15-year longstop. The FSA has confirmed this and the 15-year longstop cannot be used by firms not to consider cases. This is a legislative underpin." So, you should definitely appeal to the FSO. However, you should also be aware that endowments sold in June 1988 were subject to less specific controls on selling practices than are more recent transactions and this could damage your chances of success.

Q. I have a Tessa with the Co-operative Bank maturing in March and want advice on how to reinvest the money. Co-op is offering a Tessa-Only Isa, but is this my best option? I don't want to invest directly in shares.
PS, Nottingham.

A. Stephen Humphreys, the head of financial services at the accountant Moore Stephens, says that Toisas - Tessa-Only Isas - have a huge benefit over Tessas because they do not require a fixed-term commitment, but still provide a tax-free investment. "Most investors should make use of a Toisa even if they subsequently decide to cash some or all of the funds soon after," he says. The best Toisa rates, according to the website MoneyFacts, are 5.75 per cent with West Bromwich Building Society, fixed until 31 March 2009, for a minimum balance of £1,000. The best rate for instant access and smaller balances is Intelligent Finance, at 4.6 per cent. You should check penalty terms for early encashment.

Q. I have read the Inland Revenue's booklets about resident and non-domicile status, but I'm confused. I understand that any money other than pure capital brought into the country is taxable, but is it taxed at a graduated rate; can individuals who are resident/non-domiciled deduct personal allowance; can a husband and wife be allowed the resident/non-domicile status individually or separately?
JM, London.

A. Mike Warburton, of the accountant Grant Thornton, says: "If you are non-domiciled, but resident in the UK, you are taxable on the remittance basis for overseas earnings, income and gains. You are subject to tax in the normal way for UK source earnings, income and gains. If you remit overseas income or gains to the UK, it is added into your overall income and, therefore, taxed at a graduated rate according to the tax rate that then applies: typically 20 per cent or 40 per cent. If you are remitting pure capital, this is not taxable if that capital is from an account which has not received income or gains realised since you became UK resident.

Individuals who are resident, but not domiciled in the UK can take off their normal personal allowances against overseas income as for UK income. If the overseas income has suffered tax in that country there may be relief available against double tax under the applicable double tax treaty. Spouses are not treated in the same way for tax purposes and are judged on their own merits. Since 1973 a wife does not automatically assume the domicile of her husband, but is judged on her domicile under the same criteria as her husband: essentially the domicile of her father (a domicile of origin), or a domicile of choice if that has subsequently changed. The rules on domicile and residence are being reviewed by the Inland Revenue and we expect them to change."

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

PROMOTED VIDEO
News
Jamie and Emily Pharro discovering their friend's prank
video
News
i100
News
Tim Vine has won the funniest joke award at the Edinburgh Festival 2014
peopleTim Vine, winner of the Funniest Joke of the Fringe award, has nigh-on 200 in his act. So how are they conceived?
News
people
Life and Style
techApp to start sending headlines, TV clips and ads to your phone
Arts and Entertainment
Taylor Swift crawls through the legs of twerking dancers in her 'Shake It Off' music video
musicEarl Sweatshirt thinks so
Life and Style
tech
Arts and Entertainment
Daniel Radcliffe and Zoe Kazan in What If
filmReview: Actor swaps Harry Potter for Cary Grant in What If
News
Our resilience to stress is to a large extent determined by our genes
science
Travel
travel
Sport
sportBesiktas 0 Arsenal 0: Champions League qualifying first-leg match ends in stalemate in Istanbul
News
Pornography is more accessible - and harder to avoid - than ever
news... but they still admit watching it
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Techincal Accountant-Insurance-Bank-£550/day

    £475 - £550 per day + competitive: Orgtel: Senior Technical Accountant-Insuran...

    Sales Performance Manager, Gloucester - £290 p/day

    £200 - £290 per annum + competitive: Orgtel: Sales Performance Manager, Key Ba...

    Junior Database developer (SQL, T-SQL, Excel, SSRS, Crystal rep

    £25000 - £30000 per annum + bonus+benefits+package: Harrington Starr: Junior D...

    Java/Calypso Developer

    £600 - £800 per day: Harrington Starr: Java/Calypso Developer Java, Calypso, ...

    Day In a Page

    Ferguson: In the heartlands of America, a descent into madness

    A descent into madness in America's heartlands

    David Usborne arrived in Ferguson, Missouri to be greeted by a scene more redolent of Gaza and Afghanistan
    BBC’s filming of raid at Sir Cliff’s home ‘may be result of corruption’

    BBC faces corruption allegation over its Sir Cliff police raid coverage

    Reporter’s relationship with police under scrutiny as DG is summoned by MPs to explain extensive live broadcast of swoop on singer’s home
    Lauded therapist Harley Mille still in limbo as battle to stay in Britain drags on

    Lauded therapist still in limbo as battle to stay in Britain drags on

    Australian Harley Miller is as frustrated by court delays as she is with the idiosyncrasies of immigration law
    Lewis Fry Richardson's weather forecasts changed the world. But could his predictions of war do the same?

    Lewis Fry Richardson's weather forecasts changed the world...

    But could his predictions of war do the same?
    Kate Bush asks fans not to take photos at her London gigs: 'I want to have contact with the audience, not iPhones'

    'I want to have contact with the audience, not iPhones'

    Kate Bush asks fans not to take photos at her London gigs
    Under-35s have rated gardening in their top five favourite leisure activities, but why?

    Young at hort

    Under-35s have rated gardening in their top five favourite leisure activities. But why are so many people are swapping sweaty clubs for leafy shrubs?
    Tim Vine, winner of the Funniest Joke of the Fringe award: 'making a quip as funny as possible is an art'

    Beyond a joke

    Tim Vine, winner of the Funniest Joke of the Fringe award, has nigh-on 200 in his act. So how are they conceived?
    The late Peter O'Toole shines in 'Katherine of Alexandria' despite illness

    The late Peter O'Toole shines in 'Katherine of Alexandria' despite illness

    Sadly though, the Lawrence of Arabia star is not around to lend his own critique
    Wicken Fen in Cambridgeshire: The joy of camping in a wetland nature reserve and sleeping under the stars

    A wild night out

    Wicken Fen in Cambridgeshire offers a rare chance to camp in a wetland nature reserve
    Comic Sans for Cancer exhibition: It’s the font that’s openly ridiculed for its jaunty style, but figures of fun have their fans

    Comic Sans for Cancer exhibition

    It’s the font that’s openly ridiculed for its jaunty style, but figures of fun have their fans
    Besiktas vs Arsenal: Five things we learnt from the Champions League first-leg tie

    Besiktas vs Arsenal

    Five things we learnt from the Champions League first-leg tie
    Rory McIlroy a smash hit on the US talk show circuit

    Rory McIlroy a smash hit on the US talk show circuit

    As the Northern Irishman prepares for the Barclays, he finds time to appear on TV in the States, where he’s now such a global superstar that he needs no introduction
    Boy racer Max Verstappen stays relaxed over step up to Formula One

    Boy racer Max Verstappen stays relaxed over step up to F1

    The 16-year-old will become the sport’s youngest-ever driver when he makes his debut for Toro Rosso next season
    Fear brings the enemies of Isis together at last

    Fear brings the enemies of Isis together at last

    But belated attempts to unite will be to no avail if the Sunni caliphate remains strong in Syria, says Patrick Cockburn
    Charlie Gilmour: 'I wondered if I would end up killing myself in jail'

    Charlie Gilmour: 'I wondered if I'd end up killing myself in jail'

    Following last week's report on prison suicides, the former inmate asks how much progress we have made in the 50 years since the abolition of capital punishment