We have referred to the transitional rules in recent articles. We thought it might be useful to set these out in full in the table below.
|
Aspect |
Requirements to qualify for transitional treatment |
|
One-page summary |
Not applicable, the one-page summary is required in all suitability reports from 1 October 2020 although certain elements relating to workplace pension may be omitted – see below. |
|
Contingent charging |
Firms may charge contingently where they can demonstrate that:
|
|
Consideration of workplace pension scheme (WPS) |
Firms may:
… where they can demonstrate that:
|
|
Cash flow modelling* |
Firms need not carry out cashflow modelling as set out in the new rules where they can demonstrate that:
|
* The new rules on cash flow modelling
The rules shown below are applicable from 1 October 2020 unless the transitional conditions listed above apply.
Where a firm prepares a cashflow model, it must:
- produce the model in real terms in line with the CPI inflation rate;
- (if the net income is being modelled) ensure that the tax bands and tax limits applied are based on reasonable assumptions;
- take into account all relevant tax charges that may apply in both the ceding arrangement and the proposed arrangement; and
- include stress-testing scenarios to enable the retail client to assess more than one potential outcome.
Budget Announcement: Stamp Duty Land Tax & Capital Gains Tax Changes
Doug McFarlane Suitability 2024, Budget, content management, Mortgage, PI, Suitability Review, Template Enhancement, Update
Following the Chancellor’s budget announcement on 30th October 2024, we have updated ATEB Suitability to reflect the changes in Stamp Duty Land Tax (SDLT) and Capital Gains Tax (CGT) rates. The revised SDLT rates are available in the optional Glossary of Terms when making Mortgage Recommendations. For CGT, the updated rates can be found in […]