Equitable Life hit for pounds 1m over failure to pay unit trust tax
Friday 12 November 1999
The Inland Revenue has received from Equitable Unit Trust Managers (EUTM) pounds 985,000 in back tax, interest and fines over the non-payment. EUTM was also fined pounds 80,000 for breaking IMRO's rules on the same count and has paid pounds 23,000 for its disciplinary hearing.
EUTM failed to value properly two unit trusts, given certain tax liabilities they acquired through offshore collective investment schemes in more high- risk sectors like emerging markets, and failed to pay tax on the schemes from June 1988 to June 1998. The trusts were the International Growth Trust and the Far Eastern Trust, totalling pounds 600m worth of funds.
Usually, capital profit on investments held by units trusts are exempt from tax and capital gains, but this does not apply to some offshore collective investment schemes. This means that the unit trust is able to buy a stake in an investment vehicle which invests in higher risk sectors like emerging markets. Profits and disposals are treated as income and are subject to corporation tax.
It was only after 10 years of not paying the tax that EUTM woke up to the fact last year that something was wrong, when it informed IMRO immediately. IMRO also fined EUTM for its failure to have procedures which would have identified the potential tax liability in the first place.
EUTM said: "It has all been most unfortunate but we have had a complete review of our auditing and tax systems and we are paying the fines rather than the unit trusts themselves. Thus investors have benefited to a very small extent by the trusts not having to pay tax they should have."
The battle for control of Stieg Larsson's £30m legacy
Geoffrey Macnab does not like the comedian's big screen debut
Look beyond the usual shows for the best festive telly
Michelle Nijhuis' daughter insists (s)he is, and she learnt a valuable lesson on gender in books
newsFormer soldier taped 33 of the animals to the floor and then stamped on them one by one
Robin Thicke named sexist of the year 2013
PAs cleared of fraud - and Nigella Lawson left reeling at 'ridiculous sideshow' of drug allegations and public dissection of marriage to Charles Saatchi
Cycle death inquest: Boyfriend hugs driver of 32 tonne tipper truck that killed his girlfriend
Paul Walker death caused by speed alone
Apollo Theatre collapse: Scores injured after ceiling collapses in London's West End
- 1 Sun will 'flip upside down' within weeks, says Nasa
- 2 Christmas comes early: Justin Bieber is 'retiring from music'
- 3 Iain Duncan Smith leaves Commons food banks debate early
- 4 Cycle death inquest: Boyfriend hugs driver of 32 tonne tipper truck that killed his girlfriend
- 5 Burglar steals video tapes of child abuse, hands them into police
- < Previous
- Next >
iJobs Money & Business
£Negotiable: Citifocus: High calibre individual with institutional client serv...
£120000 - £150000 per annum: Cornwallis Elt : Programme Manager, Strategy Lead...
£55000 - £120000 per annum: Pro-Recruitment Group: The Financial Services Tran...
£600 - £700 per day: Harrington Starr: Client based in West London is looking ...