Skandia International, part of Old Mutual Wealth, has said that it will stop charging for advice on the annual 5 per cent tax-free withdrawal allowance for offshore bonds, the firm said in a statement.

Skandia International, part of Old Mutual Wealth, has said that it will stop charging for advice on the annual 5 per cent tax-free withdrawal allowance for offshore bonds, the firm said in a statement.

The move follows HMRC’s recent confirmation that, provided certain conditions are met, all advice relating to investments linked to the offshore bond can be considered as advice to the life company and not to the advisor.

As a result, the advice fee is deemed to be part of the product and does not impact the annual 5 per cent tax-free withdrawal allowance.

Skandia International previously used this model on its discretionary asset management service and is now able to roll it out to all advisors offering investment advice.

“This enhancement is fantastic news for customers. It means they have more of the annual 5% tax-free allowance to take as withdrawals. We’ve had a great response from advisers to this development as they see this as a real tangible benefit to their customers, and are keen to set up their new offshore bond business in this way,” said Rachael Griffin, head of technical marketing at Skandia.