What’s New bulletin - April

UPDATE from 21 April 2023 to 4 May 2023

TAXATION AND TRUSTS 

Charities in England and Wales given new guidance on financial controls

(AF1, RO3) 

The Charity Commission for England and Wales (the Charity Commission) has issued updated guidance on charities' financial controls to protect against the risks of fraud and new technology. 

The issue 

Charities in England and Wales receive a total income of £80 billion each year and the Department for Science, Innovation and Technology published research which reported that 24% of charities experienced a cyber-attack in the last 12 months. This is an increase from 12% the previous year with phishing and impersonation being the most common types of attacks. 

The solution 

The Charity Commission is calling on charities to check their financial controls protect against risks, including those from newer technology such as cryptoassets, with the help of its redesigned guidance. 

The revised guidance Internal financial controls for charities (CC8) covers issues that were not in existence or widely relevant to the sector when first drafted, such as cryptoassets and mobile payment systems. 'As more and more charities move to operate online and newer technologies are developed, such as the use of cryptocurrencies, trustees will need to navigate risks that might not have been previously considered', says the Charity Commission. 

The guidance highlights risks from cryptoassets such as vulnerability to theft by hackers, potential sudden changes in value and difficulty in tracing donors. It also notes a lack of protection from agencies such as the Financial Services Compensation Scheme (FSCS) or the Financial Conduct Authority (FCA) if something goes wrong. 

The Charity Commission has also updated its existing advice on more traditional risks, such as those occurring when fundraising and holding public collections, making payments to related parties and operating internationally. 

Comment 

Strong internal financial controls can play an important role in ensuring trustees can safeguard their resources. 

The 25 percent corporation tax rate - the implications where an accounting period spans 1 April 2023

(AF2, JO3) 

The Association of Taxation Technicians has published a useful guide, following confirmation from HMRC that total profits (which includes any capital gains) for straddling accounting periods have to be time apportioned. 

The main rate of corporation tax is increased to 25%, from 1 April 2023, for companies with profits over £250,000. 

A small profits rate of 19% applies for companies with profits of £50,000 or less, and marginal relief applies for profits greater than £50,000 (the lower limit) up to £250,000 (the upper limit).

Marginal relief provides a gradual increase in the corporation tax rate between the small profits rate and the main rate. 

Where an accounting period spans 1 April 2023, it has to be split into two notional accounting periods – one ending on 31 March 2023 and the other starting on 1 April 2023. 

For example, a company with a 31 December accounting date will have two notional accounting periods in the year ending 31 December 2023: 

• A first notional period running from 1 January 2023 to 31 March 2023.
• A second notional period running from 1 April 2023 to 31 December 2023. 

Only the profits of the second notional accounting period (i.e. the one starting on 1 April) fall within the new rates. The profits of the first notional accounting period (ending 31 March) will be taxed at the previous corporation tax rate of 19%. 

To calculate the profits for each notional period, the total taxable profits for the full year need to be time apportioned. 

However, what happens when a company realises a capital gain (for example on the disposal of an investment property) during a period which straddles 1 April 2023? Is the gain apportioned on a time basis between the two notional periods in the same way as other profits? Or is it allocated it in full to the notional period in which the disposal occurred? The answer could have a material impact on the tax payable on the gain. 

HMRC has now confirmed to the Association of Taxation Technicians (ATT) that total profits (which includes any capital gains) for straddling accounting periods have to be time apportioned between the two notional periods falling pre-1 April 2023 and from 1 April 2023. There is no separate allocation of any capital gains to those periods by reference to when the gains are realised. 

This flows from s4 CTA 2010, which states that the profits of a company’s accounting period on which corporation tax is chargeable, are the company’s total taxable profits which are made up of: 

• The amount on which the company is chargeable in respect of income after deduction of all reliefs, and 

• Chargeable gains of the accounting period after any relevant reliefs (i.e. net of allowable capital losses of the period and brought forward capital losses). 

Where amounts have to be apportioned between different periods, s1172(1) CTA 2010 requires this to be done on a time basis. s1172(2) does however provide for a different basis where specific provisions override that. For example, the commencement provision for the introduction of the loss reform legislation in 2017 provided that, where apportionment on a time basis produced a result that was unjust or unreasonable, an alternative just and reasonable basis could be used instead. However, there is no such alternative basis provided for in the commencement provisions for the new corporation tax rates from 2023 in para 34(2) Sch 1 FA 2021. As a result, we are back to time apportionment of all profits, including capital gains. 

For example, a company has taxable trading profits for the year ending 31 December 2023 of £1m and disposed of a chargeable asset in January 2023, realising a gain of £200,000. The company will have two notional accounting periods for 2023: 

• A first notional period running from 1 January 2023 to 31 March 2023.
• A second notional period running from 1 April 2023 to 31 December 2023. 

The total taxable profits of £1.2m (comprising the trading profits and taxable gain) will need to be time apportioned between the two periods, as follows: 

• First notional period = £1.2m x (90/365) = £295,890 which is taxable at 19%.
• Second notional period = £1.2m x (275/365) = £904,110 which is taxable at 25%. 

As outlined above, the commencement provisions provide for accounting periods straddling 1 April 2023 to be treated as two different notional accounting periods with profits (including gains) time apportioned between them. 

In the previous example, this apportionment was necessary to ensure that the new 25% main rate was correctly applied from 1 April 2023. Smaller companies will also need to check whether their apportioned profits for the second notional period are low enough to qualify for the small profits rate or marginal relief in that period. 

For these purposes, as the second notional period will be less than 12 months long, it will be necessary to reduce the upper and lower limits accordingly. 

For example, a company with a 31 December 2023 year-end will have two notional accounting periods: 

• 1 January 2023 to 31 March 2023.
• 1 April 2023 to 31 December 2023. 

The profits apportioned to the first period are taxed at 19%. 

The profits apportioned to the second period need to be compared to the reduced lower limit of £37,671 (275/365 x £50,000) and reduced upper limit of £187,841 (275/365 x £250,000) to see if the small profits rate or marginal relief apply. It will also be necessary to reduce these

limits further if there are any associated companies in the second notional period.

There is more information on the interaction of straddling periods, thresholds and associated companies in HMRC’s guidance at CTM03955. 

INVESTMENT PLANNING

Innovative finance ISA investments

(FA5) 

HMRC has recently updated its ISA guidance. Information about peer-to-peer loans has been updated. Information about alternative finance arrangements has been added. Whilst this information is aimed at ISA managers, it is nevertheless useful reference material. 

An innovative finance ISA is a type of ISA that adds a tax-free wrapper to savings income from peer-to-peer lending. HMRC’s guidance provides information on which peer-to-peer loans, crowdfunding debentures and cash investments qualify for innovative finance ISAs. 

Innovative finance ISAs are only available to investors who are 18 or over. 

From 1 January 2021, firms based in the European Economic Area (EEA) must seek full authorisation by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA) in the UK, if required, to access the UK market. 

Investments that managers may buy, make or hold (qualifying investments) in an innovative finance ISA are: 

• peer-to-peer loans;
• crowdfunding debentures;
• cash;
• alternative finance arrangements. 

Peer-to peer loans 

Eligible peer-to-peer loans are facilitated by an operator authorised under section 31(1)(a) or (c) of, or Schedule 5 to, the Financial Services and Markets Act 2000. 

The operator must have permission, other than interim permission under Chapter 4 of Part 8 of the Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2013 to carry on one or more of the activities specified in Articles 36H (operating an electronic system in relation to lending) and 39G (debt administration). 

If a borrower defaults and the loan is assigned or replaced in exchange for a payment to the lender, the payment will not be made under an Article 36H agreement, but will be eligible to remain in the ISA wrapper as long as the loan was an Article 36H agreement when the lender entered into it. 

All loans must be made using cash held by the ISA manager and must be entered into for genuine commercial terms and not as part of a scheme or arrangement the main, or one of the main purposes of which is the avoidance of tax. 

Peer-to-peer loans held outside of the ISA wrapper cannot be sold, and re-purchased inside an innovative finance ISA except when the loans are sold and are made available for purchase (using cash held by the ISA manager), at the same price, by any lender in the open market. That is, the loans must be available for purchase by more than one prospective purchaser. 

It will not usually be open to a platform to purchase a lender’s portfolio of loans and for the proceeds to be used to reacquire the same loans inside the ISA wrapper. Any purchase would need to be of loans made openly available to any prospective lender. 

Within the meaning given in section 170 of ITA 2007, the investor must not be connected with the issuer of the loan or the lender. The loan must not be connected to any other investment or loan held outside the ISA wrapper. Loans made available to an investor solely by reason of their employment or position within an issuing company or charity are excluded from eligibility as a qualifying peer-to-peer loan. 

Crowdfunding debentures 

Crowdfunding debentures are provided for in the Individual Savings Account (Amendment No. 3) Regulations 2016 which extends the range of investments that can be held in an innovative finance ISA, these are: 

• crowdfunded debt securities issued by companies;
• bonds issued by registered charities. 

Eligible crowdfunding debentures must:

• be transferable securities in accordance with section 102A(3) of FISMA 2000;
• create indebtedness;
• be facilitated by a person with FCA permissions to arrange deals in investments;
• be made through an electronic system operated by that person in the UK or the EEA. 

The ISA investor must be treated as the client of the person operating the crowdfunding platform, or a person acting on behalf of the platform. This arrangement offers the investor FCA regulatory protections and recourse to the Financial Ombudsman. 

The platform (or the person acting on their behalf) must receive payments, make payments and exercise (or facilitate the exercise of) rights under or in respect of the debentures. 

Qualifying debentures must be invested in within an innovative finance ISA and using cash subscriptions held by the ISA manager. They must be entered into for genuine commercial terms and not as part of a scheme or arrangement, the main or one of the main purposes of which is the avoidance of tax. 

Within the meaning given in section 170 of ITA 2007, the investor must not be connected with the issuer of the debenture. The investment must not be connected to any other investment held outside the ISA wrapper. Investments made available to an investor solely by reason of their employment or position within an issuing company or charity are excluded from eligibility as a qualifying debt security. 

Alternative finance arrangements 

Alternative finance arrangements are arrangements falling within S47 and 49 of Finance Act 2005 (savings products providing similar types of return to a deposit savings account). It covers products such as Sharia accounts that do not pay interest. 

Cash 

An investor’s cash subscription and any other cash held in an innovative finance ISA (for example, loan repayments and other payments when loans default) must be held in sterling and must be deposited in: 

• an account with a deposit-taker;
• a deposit account or a share account with a building society that is designated as an ISA. 

In practice, managers can operate a single account, which may also hold other savings products, such as cash ISA, feeder fund and current account balances, as long as: 

• the account is designated as an ISA account; 

the monies relating to each investor’s ISA are recorded and can be accounted for separately. 

Electronic money providers 

Subscriptions from ISA investors cannot be held in e-money wallets while they are waiting to be invested, because e-money wallets do not meet the requirements in the ISA regulations. ISA managers must make sure that cash subscriptions and other investor funds comply with the ISA regulations. 

ISA regulation 6(4) states that cash subscriptions and other cash held by an ISA manager must be deposited in an account with a deposit taker as defined in S.853 Income Tax Act 2007. The account with a deposit taker has to be designated as an ISA account for the purposes of the ISA regulations and should be in the name of the investor. 

Transfers and withdrawals 

Transfer and withdrawal rights in relation to non-cash innovative finance ISA investments are available only as set out in the terms and conditions of the account. 

Payments when loans default 

When peer-to-peer loans default, some ISA managers allow access to a provisions fund to compensate lenders, or the loan may be paid up or bought from the lender, with the loan being taken on by the ISA manager or a debt collection specialist. 

Where compensation in respect of the poor performance, loss (in whole or in part), depreciation or risk of depreciation of a qualifying innovative finance ISA investment is received: 

• by the ISA manager, it can be used to purchase qualifying investments;
• outside of the ISA wrapper, the investor will be able to make a defaulted investment subscription. 

This applies whether or not the qualifying investment continues to be held in the ISA at the time the payment is made. 

PENSIONS 

HMRC Pension Schemes Newsletter 149 – April 2023

(AF8, FA2, JO5, RO4, AF7) 

Pension Schemes Newsletter 149 covers the following: 

• Spring Budget 2023 — lifetime allowance
• annual allowance calculator
• relief at source
• registration statistics
• pension flexibility statistics
• Managing Pension Schemes service 

Areas of interest 

Spring Budget 2023 Lifetime allowance 

In pension schemes newsletter 148 HMRC stated that the following lump sum payments that were previously subject to a lifetime allowance charge of 55% will instead from 6 April 2023 be taxed at the recipient’s marginal rate of income tax: 

• serious ill-health lump sum
• uncrystallised funds lump sum death benefit
• defined benefits lump sum death benefit
• lifetime allowance excess lump sum 

(Note in the first three payments the income tax charge only relates to funds paid in excess of the individual’s lifetime allowance). 

The lifetime allowance guidance newsletter published on 27 March 2023, provided further guidance on these payments including a new process that administrators would need to follow. 

Many representatives from across the industry raised concerns around this new process for the taxation of death benefits. These concerns were discussed in depth at the first lifetime allowance working group which took place on 4 April 2023. A strong preference was expressed for maintenance of the system in place prior to 6 April 2023. Under this process, if the member’s legal personal representative identified a chargeable amount after payment of a defined benefits lump sum death benefits or uncrystallised funds lump sum death benefit, they reported this to HMRC. It is HMRC that then assesses the tax due. 

In light of concerns raised, HMRC agreed to consider alternative options and now confirm the outcome. 

From 6 April 2023, schemes may continue to use the current process for taxation of the defined benefits lump sum death benefits or uncrystallised funds lump sum death benefit. Based on information provided by legal personal representatives, HMRC will raise marginal rate taxation (as opposed to a lifetime allowance charge) on the applicable portion of these payments. 

Annual Allowance Calculator 

HMRC are currently updating their annual allowance calculator and it is currently unavailable for calculations involving tax year 2023/24.  They expect the update to be completed in the summer of 2023. 

Registration statistics 

For tax year 2023/23 HMRC received 1511 applications to register new pension schemes.  Of these 68% have been registered and they refused registration for 21%.   The remainder are awaiting a decision.  

Pension flexibility statistics 

HMRC have published the latest statistics on the number of tax repayment claims forms for pension flexibility payments. 

From 1 January 2023 to 31 March 2023, HMRC processed: 

• P55 ― 9,654 forms
• P53Z ― 4,361 forms
• P50Z ― 1,841 forms 

The total value repaid was £48,550,827. 

TPR publishes 2023 Annual Funding Statement

(AF8, FA2, JO5, RO) 

The Pensions Regulator (TPR) published its Annual Funding Statement 2023, which is relevant to trustees and sponsors of all private sector defined benefit (DB) pension schemes. It applies particularly to those undertaking an actuarial valuation with an effective date between 22 September 2022 and 21 September 2023 (referred to as ‘Tranche 18’ valuations) or undertaking reviews of funding and risk strategies. TPR also notes the relevance of the statement to schemes that may be receiving requests for reduced contributions, amendments to contingent asset arrangements, or proposals for using surplus. 

The statement includes a reminder that the current funding regime applies until all the new legislation and the revised DB funding code come into force. 

TPR also notes that its guidance on assessing, and monitoring sponsor covenants will be updated later this year, providing more detail on covenant visibility, reliability, and longevity (which are key aspects of covenant in the draft DB funding code published last year) as well as how to treat guarantees for scheme funding purposes. It will also provide more information regarding environmental, social and governance (ESG) risks and how these can be factored into the covenant. 

Context for the statement 

TPR notes that the significant rise in gilt yields and favourable returns on return-seeking assets will mean many schemes’ funding positions will be well ahead of plan, with a significant number now exceeding buyout funding and only a minority seeing recent funding position deteriorations. TPR also notes that the value of the assets and liabilities of many schemes will now be much smaller than at the time of the previous valuation, meaning that sponsor covenants may now appear proportionately stronger, particularly so for contingent assets expressed in fixed monetary amounts. Schemes are urged to review long-term objectives and funding and investment strategies that were set when interest rates were low and TPR encourages schemes to do this in the light of changes in circumstances, taking into account funding, investment and covenant. 

Despite the improvement in funding levels for many schemes, the statement pushes trustees to recognise the economic uncertainty that could continue to affect schemes and sponsors, including further interest rate rises, high rates of inflation and geopolitical instability. 

For those schemes that remain open to accrual, the rise in interest rates will have led to a reduction in the expected cost of future benefit accrual and, where they are immature, they may also have experienced significant increases in funding levels giving rise to a wide choice of future strategies. 

Funding considerations 

If funding levels have improved significantly, trustees should consider whether continuing with the existing strategy is in the best interests of members, or whether using some of the funding gains to finance de-risking is more appropriate. 

TPR notes that schemes in this position may also be facing calls from employers to reduce or suspend contributions as well as calls from members for discretionary pension increases where scheme pensions have not been fully indexed in line with inflation. 

In the minority of cases where funding levels have fallen, TPR believes that funding and investment strategies should be reset in order to reach long-term targets, with operational processes reviewed to ensure future resilience (including the matters set out in TPR’s liability driven investment (LDI) guidance, see above). 

The statement provides specific guidance on the funding considerations for ‘re-thinking strategies’ across three groups of schemes depending on how well funded they are relative to buyout (‘solvency’) and technical provisions measures: 

Group I: Where funding level is at or above buyout 

TPR estimates that one quarter of schemes could now be in this position. Trustees should consider whether proceeding with a buyout is the best way to lock in any funding gains, or whether running on the scheme may be a better option for members, as it offers them potential to benefit from future surpluses. Employers may prefer to have an ongoing arrangement that allocates some surplus to fund scheme expenses, future accruals or to benefit members in a DC section. Considerations for running on include the future use of any surplus versus the risks involved and how these can be mitigated. TPR stresses the importance of taking advice on these issues, considering the scheme’s rules and the trustees’ duties. 

Where buyout is the preferred route, schemes should prepare thoroughly to put themselves in the best possible position both on the data and benefits side as well as with the assets, recognising that the overall process can be a lengthy one. 

Group II: Where funding level is above technical provisions but below buy-out 

Schemes should consider whether their long-term objective remains appropriate (and where a long-term objective and target hasn’t been established then it should be done as a priority). Schemes should also review their plans for transitioning their investment strategy over time to align with the long-term objective and consider setting triggers for further action, for example if the funding level improves significantly. 

TPR suggests that it would be good practice to consider the steps that can be taken now to align with the key principles in the draft funding code, particularly in relation to low dependency funding targets, investment allocations and funding basis. 

Group III: Where funding level is below technical provisions 

The focus for these schemes should be on eliminating the funding deficit as soon as the employer can reasonably afford. Technical provisions should be revisited to ensure that they are consistent with the scheme’s long-term funding target, with risk-taking supported by the covenant and reducing over time. 

If the funding position has deteriorated over the past year the trustees should understand the reasons for this and re-build their funding and investment strategy reflecting the changed circumstances. 

TPR notes that its guidance from previous years still applies and is repeated in the tables accompanying the statement. 

Investment considerations 

The asset allocation for many schemes may have changed materially as a result of the rise in interest rates in 2022. Schemes should consider the implications for their investment strategy including the split between matching and growth assets, the need for future investment returns and the amount of leverage in LDI (referring to TPR’s latest guidance ), taking into account the funding position and the scheme’s objectives. 

Trustees should seek advice on managing illiquid assets where these represent a greater proportion of the scheme’s total assets than originally envisaged, and TPR outlines a range of factors to take into consideration. 

Covenant considerations 

While there may appear to be less reliance on covenant if the funding position has improved, TPR stresses the importance of understanding the impact of different economic scenarios on the scheme and how these could increase the dependency on the sponsor. 

Trustees should also not overlook the short-term impact of the current economic environment on the covenant, including the effects of higher interest rates and energy costs, ensuring that they understand the key factors affecting the employer’s resilience. 

TPR warns against complacency when monitoring covenant, reminding trustees of the importance of obtaining financial projections and business plans while also ensuring they adhere to information sharing protocols. It recognises that some Trustees may consider it appropriate to amend the scope of their covenant assessment to focus more on covenant longevity and ESG issues. 

Those schemes with a sponsor experiencing corporate distress or acute affordability restrictions should refer to TPR’s additional guidance. 

Other considerations 

The statement acknowledges that mortality rates in 2022 were higher than pre-COVID levels but notes the uncertainty over the future outlook and the need for care in interpreting past trends. TPR expects many trustees will revise their mortality assumptions after taking advice from the scheme actuary and reiterates that any changes should be appropriate and justifiable. However, unlike last year’s statement, no guidance is given on the magnitude of the changes in liability values that TPR is expecting for current valuations. 

TPR’s views on the challenges posed by high inflation and the planned changes to RPI from 2030 onwards remain unchanged from those set out in last year’s AFS. 

• If a scheme is ahead of plan and considering whether to reduce or stop deficit contributions, trustees should: For weak or weakened covenants: consider whether the technical provisions are sufficiently prudent and whether the level of investment risk is still supported
• Where the scheme has a technical provisions (TP) deficit: consider reducing the remaining length of the recovery plan and any allowance for investment outperformance before reducing the level of contributions. 

If shareholder distributions exceed contributions or if covenant leakage is material, TPR considers that it is unlikely to be appropriate to reduce deficit recovery contributions (DRCs) while the scheme has a TP deficit. 

Where a scheme agrees to stop or reduce DRCs outside of a formal valuation, TPR encourages the trustees to put in place a mechanism to recommence contributions if funding gains reverse. 

If employers seek to renegotiate the terms of any contingent assets, TPR expects trustees to evaluate proposals critically and to understand the value being given up against a range of reasonable scenarios. If any changes are made trustees should consider how to make provision for the arrangements to be revised upwards if the funding position later deteriorates.

 

Regulators issue further guidance on enhancing resilience in Liability Driven Investments

(AF8, FA2, JO5, RO4) 

The FCA has published further guidance for liability-driven investment (LDI) fund managers on how to enhance the resilience of LDI funds. The FCA said that the guidance principally applies to FCA-authorised firms providing services in relation to LDI strategies, which includes the management of mandates from pension schemes and pooled or single-client LDI funds. 

FCA Executive Director of Markets Sarah Pritchard commented: “Since September last year, we have been closely monitoring asset managers using LDI strategies as they make improvements and the sector is now much more resilient to potential risks, but there is more to be done. This guidance sets out what we expect in terms of risk management, stress testing and client communication, so that the necessary lessons are learned from last September’s extreme events. Many of these lessons will be relevant to firms beyond the LDI sector.” 

The Pensions Regulator (TPR) has also published guidance containing the practical steps that trustees should take to manage risks when using leveraged liability-driven investments (LDI). The guidance addresses where LDI fits within a scheme’s investment strategy; setting, operating and maintaining a collateral buffer; testing for resilience; making sure schemes have the right governance and operational processes in place; and monitoring LDI. TPR also emphasised that it expects trustees to only invest in leveraged LDI arrangements which have put in place an appropriately sized buffer.

TPR’s Interim Director of Regulatory Policy, Analysis and Advice Lou Davey commented: “The unprecedented market volatility seen last September clearly demonstrated there is the need for stronger buffers, more stringent governance and operational processes and more oversight by trustees. Trustees must understand the risks they carry in their investment strategy, and only use leveraged LDI if appropriate. Our guidance provides practical steps to ensure they achieve this vital balance, and we expect trustees to use it.” 

The Pensions and Lifetime Savings Association (PLSA) has commented on TPR new guidance for using leveraged liability-driven investment (LDI). In their Press Release, PLSA Deputy Director of Policy Joe Dabrowski said the guidance is a “helpful resource” and commented: “The industry has adapted well following those events, and schemes using LDI are generally holding additional collateral buffers at the levels suggested in the guidance already. It is important that the guidance is a 'living document' and updated as the market changes. We note that a 'standing level' of 250 [basis points] collateral buffer has been recommended — it is important however that any level of collateral holding should be evidence-based and reflect prudent market risks for the strategy, rather than scenarios, which could be too soft or excessively cautious and come at cost to performance.”

 

FCA: British Steel Pension Scheme: Tools for firms

(AF8, FA2, JO5, RO4, AF7) 

The FCA has updated its page: “British Steel Pension Scheme: Tools for firms”. It confirms that: 

• The FCA’s new British Steel Pension Scheme (BSPS) Redress Calculator has been prepared in accordance with the Financial Reporting Council’s technical actuarial standards (TAS 100 and TAS 300). 

• Firms are obliged to use this calculator to work out the level of redress, if any, that may be due to any former BSPS members. 

• The main issue with the Redress Calculator is that the DC fund value use has to be that arising solely from the CETV. Now, that’s pretty straight forward provided: 

• No other pensions funds have been added, either from contributions or transfer-in and if no withdrawals have been made.
• If this has occurred, the FCA simply state the adviser will need to apportion funds.
• However, this will be a complex process made worse if there have been fund switches or portfolio rebalancing made since the CETV was received. 

The page also includes a: 

• User Guide outlining each of the steps involved, from accessing and opening the calculator through to inputting information, creating outputs, and what firms must do with these outputs.
• Technical Report containing details on the calculator inputs and setting out the calculation methodology used in the calculator.