FURBS
Originally sent: July 19, 2004The government seems convinced it has now killed FURBS off altogether and has virtually made a statement to that effect in the explanatory notes to the 2004 Finance Bill.
FURBS has died before but, as Mark Twain said after reading his own obituary in the New York Journal, ?The reports of my death are greatly exaggerated!? And as folk violinist Dave Swarbick, reading in the Telegraph of his own death in a hospital in Coventry said, ?It?s not the first time I have died in Coventry!?
Many of us remember the first time FURBS was killed off. This was when NI was introduced on FURBS contributions. Previously many financial advisers had been using FURBS as a form of National Insurance avoidance. Clearly, if that were the main purpose then classifying a FURBS contribution as a benefit on which NI is payable rather kills off that use of a FURBS. Large institutions which had been promoting the use of FURBS in this way withdrew their product. Much was written in the financial press about the death of FURBS at that time. Those of us in the know, who were using FURBS for far more than simply NI avoidance, felt rather like Mark Twain or Dave Swarbick ? we knew FURBS was far from dead.
Now I would be the first to agree that the changes in the Finance Bill radically change the nature of a FURBS. But the FURBS can join with Horace in saying ?Non omnis moriar? (I shall not altogether die). Post April 2006 we will not be able to do many of the things we can do with a FURBS now (I feel a ?buy now while stocks last? slogan coming on!), but there are ways we will be able to use it then that are simply not possible now.
So perhaps in April 2006, after the last of many sales of pre-simplification FURBS we will be saying ?the FURBS is dead ? long live the FURBS!?
Adviser Breakthrough Training Solutions Ltd. takes no responsibility for loss occasioned by any person acting or refraining from action, or in consequence of any other person acting or refraining from action, as a result of the material in this article.
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