What's new bulletin April 2022

TAXATION AND TRUSTS

Student loans - the impact of the latest inflation figures

(AF1, RO3)

March’s RPI figure was 9.0%, the highest since January 1991. 

For English and Welsh students who started their courses in September 2012 or later (i.e. those with Plan 2 loans), the 9% RPI will, in theory, mean that from September 2022 they face an interest rate on their student debt of up to 12%, although this has not yet been confirmed by the Government. Currently the maximum rate is 4.5%, i.e. RPI for March 2021 (1.5% - yes, it was that low) + 3%. 

RPI +3% applies during the course and afterwards if income exceeds £49,130. The minimum post-course rate of interest is RPI for those with income below £27,295, with an intermediate rate charged for income between these two levels. 

To complicate matters further, the student loan legislation requires that interest charged must be ‘no higher than those prevailing on the market’. The Department for Education (DfE) bases this commercial rate on Bank of England data. However, administrative and other time lags mean that once the student loan interest rate is set for the new academic year in September, the DfE will not adjust it to take account of what should have been charged from September – if less – until the following March. It then reduces the interest rates by the overcharged level over the following six months. The ‘market rate’ requirement had no impact until July 2021, because of low inflation and relatively similar commercial interest rates. With the gap between inflation (+3%) and interest rates now becoming a chasm, the picture is very different. 

The Institute for Fiscal Studies (IFS) has crunched the numbers on what this might all mean in practice, using Office for Budget Responsibility (OBR) estimates of future interest rates and inflation. It thinks that if the OBR’s projections are correct (a large ‘if’ at present), then the maximum rate charged will: 

• rise to 12% in September 2022; then
• drop to about 7% in March 2023; then
• fluctuate between 7% and 9% until September 2024; then
• fall to zero until March 2025; before
• rising up to 5%.    

The IFS note contains a bizarre looking graph showing the pattern of change. 

In practice, because the DfE attempts to average out interest rates to satisfy the legislative market rate cap, for most of those with student debt, the swings will roughly even out. However, as the IFS explains, the six-month initial delay creates arbitrary redistributions:

• Those whose loan balances are rising over time (generally current students) will typically benefit from the delayed cap, as interest rates will be high when their loan balances are low and low when their loan balances are high. 

• On the other hand, borrowers whose loan balances are falling over time will typically lose out from the delay in implementing the repayment cap, because they will be charged a higher interest rate when their loan balance is high and a lower interest rate when their loan balance is low.  

The IFS highlights the worst-case scenario of a borrower who fully repays their loan after the repayment cap kicks in (e.g. April 2023) but before the adjustment period ends (September 2023). Such an individual will lose out from the delay, but will not be compensated in any way subsequently. 

Comment

The press headlines of 12% student loan interest may prompt more parents and grandparents to help with early repayment of loans. More than ever, this needs to be treated with great caution. The recent DfE paper on revised student financing stated that, for loans issued in 2020/21, only 56p in every £1 of debt would be ever be repaid. Trying to avoid a 12% headline interest rate by early repayment could thus be nothing more than an unnecessary contribution to the Exchequer. 

  

TRS fees paid by beneficial owner - tax implications

(AF1, JO2, RO3)

Trustees are responsible for registering their trust (if it needs to be registered) on HMRC’s Trust Registration Service (TRS), but they don’t have to physically do it themselves. If the trustees get an agent (usually an accountant) to deal with the TRS, who should pay the agent’s fee?

Payment of such fees is the responsibility of the trustees and they can use the trust funds for this purpose. If the only trust asset is a bond (or any other illiquid asset, e.g. property) so that the trustees have no cash to pay the fee, then the fee can be paid by any person connected with the trust, i.e., the settlor, trustee or a beneficiary (for TRS purposes these are referred to as "beneficial owners"). However, even if the payment is made directly to the agent, it would be treated as an addition to the trust unless it is documented as a loan. Depending on who makes the payment and whether it is a gift or a loan there will be different tax consequences. 

1. Payment made by settlor 

(i) A gift

If the settlor simply pays the agent's fee this will be treated as a gift (a transfer of value) to the trust by the settlor (in the same way as where the settlor gives funds to the trustees to pay the fee). The tax consequences will depend on the type of trust, when it was set up, whether the settlor is a potential beneficiary, the sum of the fee and the settlor's inheritance tax (IHT) history. 

In a straightforward situation when the fee is a few hundred pounds, the settlor is not a beneficiary and the sum is covered by the settlor's annual IHT exemption, there will be no immediate IHT consequences. This will often be the case where the trust being registered was set up in an earlier tax year. However, for new trusts being registered within 90 days of creation, the settlor may well have used their annual exemption for the tax year when they created the trust.   

If the amount paid to an agent causes the payer’s annual IHT exemption to be exceeded, or it has been used elsewhere, it will be a chargeable lifetime transfer (CLT). If the trust is an absolute trust, for such a gift to be treated as a potentially exempt transfer (PET) or be covered by the small gifts exemption (if the fee did not exceed £250), the money would have to be first paid to the trustees. Note that the small gifts exemption will never apply if the trust is not an absolute trust. 

If the fee is paid directly to an agent, it will not be treated as "added property" for IHT purposes. Payment of fees will not give rise to an exit charge for IHT. This is the case regardless of whether the fee is paid by the settlor or by the trustees out of the trust fund. 

Care should be exercised if the settlor is a potential beneficiary under the trust, as payment of fees by the settlor could give rise to a gift with reservation (GWR). Care should also be exercised if the trust is a pre-22 March 2006 interest in possession trust, as any additions could affect the IHT treatment of the trust.

(ii) A loan 

If a gift is not appropriate, another possibility is to lend the money to the trustees. However, where a loan is made by the settlor, this has potential tax consequences. This is because, for income tax purposes, to the extent the loan remains outstanding then the trust will be a “settlor-interested trust” which means that any trust income would potentially be taxed on the settlor and if a capital payment is made to the settlor (such as loan repayment) it will be taxed as income on the settlor to the extent the trust has undistributed income. If the only trust asset is a bond which does not produce any income, this will be less relevant. Ideally, as soon as the trustees have funds (e.g. following a segment surrender) any such loan should be repaid. 

If there is to be a loan, it should be interest free and repayable on demand and should be documented by a formal written loan agreement.

2. Payment made by a beneficiary (including a trustee who is one of beneficiaries)

(i) A gift 

If a trust beneficiary adds funds to a trust by way of gift, this could have adverse IHT consequences. First, there would be a separate settlement for IHT purposes, with the usual IHT consequences for the giver, and secondly this would amount to a GWR. 

Other IHT implications for the beneficiary would be similar to those explained in 1 (i) above.

(ii) A loan 

If a beneficiary makes a loan to the trust, as long as the loan is expressed as repayable on demand and interest free, there will be no adverse tax consequences. Any loan should be documented in a written agreement between the trustees and the lending beneficiary. 

3. Payment made by a trustee who is not a beneficiary

(i) A gift 

It is unlikely that a trustee who is not a beneficiary would be prepared to pay the fees out of their own personal funds. Should this happen, it will be treated as a gift to the trust, although a separate settlement for IHT purposes, with the usual consequences for the giver.

(ii) A loan 

The consequences of this would be as in 2 (ii) above.

Comment 

1. Additional gifts (by the settlor or any other person) should generally be discouraged, unless there will not actually be any adverse consequences in the specific circumstances. Any tax consequences that could arise must be fully explained to the potential donor.
2. If the fee is to be funded by a loan, it is preferable for this to be made by a trust beneficiary (potential beneficiary) or trustee rather than the settlor. 

 

Temporary non-residence and CGT

(AF1, RO3) 

Individuals are normally charged capital gains tax (CGT) on the gains on disposal of assets if they are resident in the UK. An individual’s residence status is determined by the rules within the Statutory Residence Test (SRT). The SRT rules also provide that a tax year may be split into a UK part and an overseas part. CGT would normally only apply to gains arising in the UK part of a split year. RDR3 Guidance Note: Statutory Residence Test (SRT) has detailed information about the SRT. 

However, an individual who is not resident in the UK may be taxed on gains if they dispose of: 

1. Assets which are (or have been) used by a trade they carry on in the UK through a branch or agency (please see CG25500Pfor further information).
2. A direct or indirect disposal of an interest in UK land. This includes UK residential property (please see HS307)). 

Subject to this, an individual who left the UK to live abroad and ceased to be resident in the UK will not be chargeable on gains made in years of assessment after they left the UK unless their non-residence was temporary and they resume tax residence in the UK within a certain time. Generally, the temporary non-residence rules will apply where an individual meets the following conditions: 

1. They had ‘sole UK residence’ for either the whole or a part of at least four out of the seven tax years preceding the year of departure.
2. They had a ‘residence period’ that was not ‘sole UK residence’ in between two periods of ‘sole UK residence’.
3. The total of the ‘residence periods’ that were not ‘sole UK residence’ did not exceed five years in length. 

For these rules, the temporary period of non-residence may start or end within a tax year due to the ‘split year’ treatment (please see section 5 of RDR3 Statutory Residence Test notes). 

Important concepts within these rules are those of ‘sole UK residence’ and ‘residence period’. These are explained in section 6 of RDR3 Statutory Residence Test notes. 

So, an individual who ceased to be UK resident in 2015/16 or earlier and does not become UK resident again until 2021/22 will not be within the scope of the rules. If they were away from the UK for a shorter period, they may need to consider the detailed rules. Further discussion of these is available in CG26500) and section 6 of RDR3 Statutory Residence Test notes. 

Temporary non-residence and CGT 

If an individual whose year of return to the UK is 2021/22 meets the conditions for temporary non-residence outlined above, then certain gains and losses arising during their period of temporary non-residence are treated as arising in 2021/22. Such gains will therefore be taxed, with losses also becoming allowable, in 2021/22. 

Example 1 

Mr Smith, who has lived all his life in the UK, left the UK on 25 March 2017 for a contract of employment abroad. He returned to the UK and resumed residence in the UK on 2 February 2022. He realised a chargeable gain (on an asset acquired before he left the UK) of £35,000 on 15 September 2017. Mr Smith fulfils all of the residence conditions in section 10A TCGA 1992: 

• he has resumed UK residence in 2021/22 (the year of return);
• there’s a period not exceeding five years immediately before non-sole UK residence where he was not resident in the UK;
• he had sole UK residence for at least four out of the seven tax years immediately prior to his year of departure (in this example, in fact, all seven). 

Mr Smith will be chargeable on this gain in the tax year of return to sole UK residence (2021/22) on the gain of £35,000. 

If the individual is non-UK domiciled and claims the remittance basis in 2021/22, then any foreign chargeable gains accruing and remitted to the UK during the period of temporary non-residence become chargeable in the year of return.  

Treaty non-residence 

Other countries may have different financial years and residency rules, so an individual may be resident in the UK under its domestic law as well as resident in another country under its law. Where an individual is a resident of both countries, the Double Taxation Agreement (DTA) between the countries will provide tie-breaker rules to enable residence for the purposes of the agreement to be determined. 

Whole tax years, or UK parts of split years, where an individual is regarded as non-UK resident in accordance with a double taxation treaty, form part of the period of non-UK residence for the rules determining whether an individual was temporarily non-resident (please see CG26680 and, for examples, CG26690). 

What gains and losses are included 

Some gains and losses arising during periods of temporary non-residence are not within the scope of these rules. An individual may acquire assets after leaving the UK for a period of temporary residence abroad. If such assets are disposed of in that period, any gains or losses on such assets are not normally treated as arising when UK residence is resumed. 

Example 2 

Continuing with Mr Smith from example 1, on 6 June 2017 Mr Smith bought 20,000 shares in a UK company. He sold all of the shares on 15 March 2018, realising a gain of £12,000. Mr Smith is within the temporary non-residence rules, but because the shares were acquired after his departure from the UK the gain is not treated as arising in the year of return. 

While gains and losses on assets acquired after leaving the UK are in general excluded from the scope of the temporary non-residence rules, there are some important exceptions to this exclusion. Some assets acquired after the period of non-sole UK residence begins, have a connection with the earlier period of sole UK residence. Gains accruing on the disposal of such assets during a period of temporary non-residence are not excluded, they would be chargeable in the tax year of return. 

These exceptions fit into three categories: 

• assets acquired from another person who themselves acquired them under no gain or no loss rules (please see CG26610); 

• assets which have had their acquisition cost reduced by a rollover relief given on the disposal of another asset which had been acquired by the individual (please see CG26630); 

• gains or losses which represent those on an asset held before the individual left the UK that were deferred until another asset was disposed of — when that other asset is disposed of, crystallizing the gain during the period of temporary non-residence, it will be chargeable in the period of return (please see CG26630). 

Gains of non-resident companies and settlements

Gains accruing to a company or a settlement during the period of non-residence may also need to be considered when UK residence is resumed. These are: 

• gains accruing to a closely controlled non-resident company, attributed to UK resident participators in proportion to the extent of their participation (please see CG57200P); 

• gains accruing to settlor-interested non-resident settlements that are attributed to a UK resident and domiciled settlor (please see CG38430Pand HS299) — the amount charged on the temporarily non-resident settlor may be reduced if gains have also been charged on UK resident beneficiaries (please see CG26590); 

• capital payments matched to the gains of non-resident trustees (please see CG38570Cand HS301). 

Where such gains arose in the temporary period of non-residence and would have been chargeable on the individual had they been UK resident, they are treated as accruing in the period of return. Where the remittance basis may be relevant, please see CG26650 onwards. 

Double Taxation Relief 

In some cases, the temporary non-residence rules may mean that a gain is taxed in another country in the year that it arises and then in the UK for the year of return. If tax has been paid on the gain in another country, the taxpayer may be able to claim relief for double taxation. HS263 Relief for Foreign Tax Paid explains this further and provides details on how to claim. 

Please see HMRC’s guidance for more information. 

 

Company residence - consultation outcome

(AF2, JO3)

This consultation sought views on the introduction of a UK re-domiciliation regime, which would make it easier for companies to relocate to the UK. 

Companies are currently treated as UK resident for corporation tax purposes if they are incorporated in the UK or the central management and control is in the UK, subject to being treated as non-UK resident by virtue of a double tax agreement. 

The Government has been considering whether specific legislation should be introduced for companies re-domiciling to the UK to clarify what the consequences would be on a company’s tax residence status, and last October it published a consultation setting out its proposals. 

As the consultation focused on the principles of a re-domiciliation regime, some respondents expressed the view that further detail on the design of the regime would be helpful. The consultation offered a high-level overview of the proposed regime design, but it represented only the early stages of the policy development process. 

The Government says that it intends to introduce a new regime, making it possible for companies to move their domicile to and relocate to the UK by enabling the re-domiciliation of companies. This policy will require legislation to be enacted. However, as more detailed analysis and engagement is needed before that is possible, the Government has said that it will continue to refine this policy, engaging as publicly as appropriate. 

You can read the consultation response document here.

 

 

INVESTMENT PLANNING

 

Government plans to make UK a global cryptoasset technology hub

(AF4, FA7, LP2, RO2)

The Government has announced plans to ensure the UK financial services sector remains at the cutting edge of technology, attracting investment and jobs and widening consumer choice.

The Government launched a consultation on cryptoassets and stablecoins last year - and has now published its response setting out the next steps. 

According to a recent news story the Government has announced plans to make the UK a global hub for cryptoasset technology and investment. 

This announcement is part of a series of measures and includes: 

• legislating to introduce a ‘financial market infrastructure sandbox’ to enable firms to experiment and innovate,
• establishing a cryptoasset engagement group to work more closely with the industry,
• exploring ways of enhancing the competitiveness of the UK tax system to encourage further development of the cryptoasset market,
• and working with the Royal Mint on a Non-Fungible Token (NFT) this summer as an emblem of the forward-looking approach the UK is determined to take. 

The Government also intends to legislate to bring stablecoins, which are a form of cryptoasset, within regulation, so they can be used as a recognised form of payment. 

The UK’s vision for being a global hub for cryptoasset technology was set out in a speech by John Glen, Economic Secretary to the Treasury, at the Innovate Finance Global Summit. He said that the UK will proactively explore the potentially transformative benefits of Distributed Ledger Technology (DLT) in UK financial markets, which enables data to be synchronized and shared in a decentralised way to potentially achieve greater efficiency, transparency and resilience. 

John Glen also confirmed that the Government will consult on wider regulation of the cryptoasset sector later this year. 

 

 

PENSIONS 

 

Pension tax relief: awareness, understanding and saving behaviours

(AF3, FA2, JO5, RO4, RO8)

HM Treasury has responded to a Freedom of Information (FoI) request, which asked for a copy of research into public attitudes to retirement savings and pensions taxation that was carried out to inform the 2015 consultation Strengthening the Incentive to Save. As part of its response to the FoI request, HM Treasury has published Pension tax relief: awareness, understanding and saving behaviours which was originally intended for publication in 2016, but was delayed due to the effects of the EU referendum. 

Even though pensions tax relief cost the government an estimated £42.7bn in 2020-21, and is frequently flagged as a possible area of reform at successive Budgets with threats of cutting or reducing the tax break from the current 25% tax relief for contributions for base rate taxpayers, approximately 40% those questioned did not realise they received tax-relief. 

When those with pensions who are aware of pension tax relief were asked how much the government has topped up their contributions, the mean response was by around 8% for basic rate taxpayers (versus 25% in reality) and 18% for higher or additional rate taxpayers. 

The research also looked at whether there were better ways to incentivise people to pay into pensions, asking whether a flat rate government top-up to contribution set at 30%, or people being able to withdraw their retirement income tax free alongside a lower government top-up of 20% was preferable.

Three in 10 (28%) thought the flat rate system would make them increase the amount they personally save for retirement, and one-third (34%) favoured the tax-free retirement option. In both cases, the majority (64% and 58% respectively) thought these different systems would make no difference to the amount they save. 

Many adults had not heard much about the mechanics of pension tax relief. Half (51%) were aware of relief rates varying based on incomes. However, when it comes to some of the more complex allowances and limits, awareness levels plummet. 

Three-fifths (59%) had never heard of the annual limit on tax-free contributions, and two-thirds (34%) knew about the lifetime allowance limit although at over £1.073m this affects a small minority of the working population. 

There are also low levels of awareness about pension statements, which the industry is trying to address with the creation of a pensions dashboard where savers will be able to see all their pension contributions in one place. This is currently being developed but is unlikely to be launched until 2024 at the earliest.

Of those who have pensions, two-fifths said they either do not remember receiving a statement in the last three years (31%) or generally do not read them (10%). 

A common theme was that participants wanted a clearer picture of how their contributions and the resulting size of their pension pot translated into the amount they would get during retirement. They felt that statements from pension providers needed to offer clearer information about this, with specific figures.

 

Engagement push by pension providers and schemes

(AF3, FA2, JO5, RO4, RO8)

Both the Association of British Insurers (ABI) and the Pensions and Lifetime Savings Association (PLSA) have announced a new industry-wide campaign to run this autumn/winter intended “to boost people’s understanding and engagement with their pensions”.  This “engagement season” campaign has been driven by research that shows that only 20% of people are confident that they are saving enough for retirement, engagement with pensions remains too low and over half of the public struggle to find their pension information. 

The expectation is that the campaign will share tips on how individuals can identify who their pension providers are, make sure contact details are up to date, check how much they have saved towards retirement and prepare for pensions dashboards. 

Fifteen providers and schemes (listed on the press release and representing approximately 41.5 million savers) have committed to support the campaign with at least £1m being pledged for it over the next three years. 

The PLSA and ABI state that the campaign’s resources will be widely promoted and made freely available across the pensions industry, with the aim of encouraging savers (in automatic enrolment schemes, DB pensions, SIPPs and also those who have started withdrawing money from their pensions) to engage more with existing pensions communications, save more to achieve a higher income in retirement, review their retirement options, consider opportunities to consolidate and see how and where their pension is invested. 

 

PASA responds to FCA pensions dashboards consultation

(AF3, FA2, JO5, RO4, RO8)

The Pensions Administration Standards Association (PASA) has published its response to the FCA consultation which sets out proposals on the role of pension providers in delivering pensions dashboards. In the response, PASA called for a “pragmatic” approach to the deliverability of the dashboards staging objectives and said: “The implementation proposals are ambitious for FCA-regulated schemes but not unachievable, although we do think the staging timetable should be staggered in the same way the DWP has proposed for occupational schemes... We would suggest providers are allowed to treat smaller legacy books of deferred annuities as separate ‘schemes’ and hence have a later staging date for these — noting the overall provider or [third party administrators] will have connected other books well beforehand.” 

Chair of the PASA Dashboards Working Group Rob Dodson commented: “The FCA consultation paper, alongside the pension’s dashboard draft regulations, provide welcomed clarity on many areas. However, there is still more to be done to support providers. In particular, the approach to mismatches and potential missed matches currently puts the onus on providers to balance their need to comply with both data protection regulations and these new pensions dashboards regulations — all with very little guidance around liability. Additionally, clarity surrounding buyout providers and the expected onboarding plans is necessary and we hope will take into account the challenges faced, especially where DB schemes may not have staged with dashboards prior to buyout.”

  

GMP Equalisation Newsletter April 2022

(AF3, FA2, JO5, RO4, RO8)

HMRC has issued Guaranteed Minimum Pension equalisation newsletter: April 2022  the third set of guidance in respect of the tax implication of GMP equalisation payments.

The main points for advisers to note includes: 

• A top-up paid by scheme following an earlier transfer, providing it is paid to a registered UK pension scheme or QROPS will be treated as a recognised transfer.
• Paying a cash lump sum instead, or a top-up to an earlier CETV, directly to the former member (or in some cases estate or another individual on death) will be authorised, if it meets the conditions for an appropriate lump sum label when paid. This label might be:
• a “relevant accretion” if the sum now due is no more than £10,000 and the original transfer was made after 5 April 2006 (with the guidance allaying concerns that had arisen about deadlines for this, saying that the six-month period for making the payment starts from when entitlement to a top-up has been established, quantified and relevant information obtained from the former member)
• as a “small lump sum” (of up to £10,000) – provided certain conditions are met, including that the former member has attained Normal Minimum Pension Age; or
• as a winding up lump sum (of up to £18,000) where the scheme itself is winding up

 

There is then the issue of “conversion” option which may be used by schemes. This means there should be no tax issues if: 

• The conversion is “on an actuarial equivalence basis only”; by which HMRC goes on to explain it means “post conversion benefits have the same or virtually the same actuarial value as the pre conversion benefits”, and
• The conversion for a member is due to GMP equalisation – which HMRC goes on to explain as meaning that “the conversion is on the basis of seeking to achieve both equality of present value on the conversion date and equality of benefit payments thereafter between men and women for benefits earned from 17 May 1990”. 

Members yet to retire

HMRC acknowledges that pensions tax rules particularly impact conversion for members who have not yet retired.  For example, a deferred member who might normally not use any annual allowance in the arrangement because they benefit from the deferred member carve out (DMCO), could, as a result of ‘GMP ceasing to be GMP’, see annual allowance usage for the year of conversion and thereafter.  Also, those with fixed protection could lose it.  The good news is that there is a strong hint that HMRC is looking at “potential for legislative change” to provide an appropriate outcome on the annual allowance.  This is much needed due to the technical workings of the annual allowance in inflationary times. 

The guidance also gives reassurance that for deferred pensioners who left before A-day, and therefore are usually outside the annual allowance regime, conversion as described above will not cause them to come into it. 

Pensioner members

The rest of the guidance gives helpful reassurance on technical points for those who are already pensioners at conversion.  These include the following: 

• Annual allowance – conversion after the tax year of retirement will not generate a pension input amount.
• DMCO – conversion of crystallised benefits in the tax year of retirement does not affect the assessment of whether the DMCO applies to the member in that tax year.
• Fixed protection – conversion any time after retirement will not trigger its loss if all benefits in the arrangement have been crystallised.
• Lifetime allowance – whilst conversion after retirement could result in a benefit crystallisation event (BCE3), it would depend on the extent of any immediate jump in the conversion pension being paid relative to a dual record equalisation method applied by the scheme to calculate any arrears due and any restatement of past lifetime allowance usage. 

 

TPR publishes regulatory intervention report and Determination Notice on Dosco Group

(AF3, FA2, JO5, RO4, RO8)

The Pensions Regulator (TPR) has published a Regulatory Intervention Report and Determination Notice in relation to the Dosco Overseas Engineering Ltd. TPR used its powers to issue a £2m contribution notice to an overseas parent company, SMT Scharf AG (Scharf), a German based company, and secured a £130,000 settlement with former Chief Executive of the Dosco Group Martin Cain, to protect a 600-member DB pension scheme. The case also marks the first time TPR’s Determinations Panel has awarded additional sums for lost investment returns and interest. 

TPR Executive Director of Frontline Regulation Nicola Parish said: “This case sends a clear warning to corporate entities and individuals that TPR will take action where appropriate to protect schemes regardless of their size. It also shows that the fact a target is based overseas is no obstacle to the use of our anti-avoidance powers. Scharf showed a complete disregard for the scheme which was left with no funding or prospect of financial support. We put savers at the heart of all we do and we take an extremely dim view when their interests are deliberately neglected in this way.”