HMRC clarifies RDR position for ISAs

HM Revenue & Customs (HMRC) has clarified its position on commission rebates into individual savings accounts (ISAs) in its latest update.

The government says rebates from managers into ISAs when the retail distribution review (RDR) comes into effect will be counted as new units and will not be classed as a new subscription.

However, cash rebates to the customer which are then reinvested in a new ISA will be classed as a new subscription.

Trail commission forfeited by advisers in favour of a single remuneration agreement would also count as a new subscription to an ISA, despite the payment which will be made by the adviser to the customer by way of a provider.