Change of agency - Receive 65% of the trail commission paid on your Enterprise Investment Scheme (EIS), Venture Capital Trust (VCTs), and Inheritance Tax Investments (IHT).
Transfer your existing VCTs, EIS or IHT investments to WealthMe to potentially earn hundreds or even thousands of pounds in trail commission.
Have you ever arranged any VCTs, EIS or IHT products with other execution only brokers or Independent Financial Advisors (IFAs)?
If you like to discuss this further, then please call us on
033 33 44 55 22 or please click here for contact details.
Many financial products pay ongoing commission every year to the person or company that originally arranged the product for you. This commission is known as ‘renewal’ or ‘trail’ commission. This commission comes out of the charges on the product, and even if the product was purchased directly, it is rare that the charges on the product are reduced. One reason for renewal commission is to remunerate a financial adviser for providing an ongoing service to you without you having to pay this directly. Renewal commission may be paid out of the yearly charges on your financial product, and/or deducted from your contributions on a regular contribution product. In some cases, the original financial adviser may no longer be providing an ongoing service, but ongoing commission may still be paid. Please note that not all products pay renewal commission.
REBATE OF ANY ONGOING COMMISSION
If any of your existing investments (eg Venture Capital Trusts, Enterprise Investment Schemes, IHT Business Property Relief Investments, ISAs etc) pay any ongoing commission, then you can appoint ‘WealthMe’ as your agent and we will rebate a proportion of the commission we received from the product provider back to you.
If you wish to appoint ‘WealthMe’ as your agent for some/all of your existing investments, then we will rebate any ongoing commission that is received annually. Any trail commission we receive will be paid to you in April/May, based on the amount received in the previous year subject to 35% of the trail commission payment as an administration fee or a minimum fee of £50 per annum, whichever is greater. All trail rebates will be paid net of basic rate tax and are to be treated as taxable income by you, as stipulated by HMRC.
Please note that if the product provider ceases paying these commissions for whatever reason, your trail commission rebate will cease. Renewal or trail commissions is often based on the value of the investment, which can rise or fall.
* - After deduction of basic rate Income Tax. If you are not a basic rate taxpayer, further Income Tax may be due.
TAXATION OF TRAIL COMMISSION REBATES
On the 25 March 2013 HMRC issued Revenue & Customs Brief 04/13, which stated that from the 6 April 2013 trail commission rebates are subject to Income Tax and firms, including ‘WealthMe’ that rebate any trail commission must deduct basic rate Income Tax from the payments. HMRC has no system in place for the rebate to be paid gross to non-taxpayers. Non-taxpayers will need to claim the tax back from HMRC. As with other taxable income, for taxpayers, the income will need to be included on your tax return.
We believe that any trail commission rebates from VCT and EIS investments are subject to Income Tax.
For ISAs, if the trail commission is first paid to ‘Wealthme’, then our trail commission rebate to you is subject to Income Tax. If the rebate payment comes from the ISA Manager directly it is not subject to Income Tax. This means that automatic ISA trail commission rebates made by a fund supermarket or platform will generally not be subject to Income Tax. Please note, we are not tax advisers and we recommend you discuss this with a tax adviser for clarification and confirmation.
WHAT DO YOU NEED TO DO NEXT?
To change the agency to ‘WealthMe’ please do the following:
- Call us on 033 33 44 55 22 to discuss this service further, or please click here for contact details.
- We will discuss your options in more detail and set you up on our secure client portal.
- We will conduct relevant checks eg AML checks.
- We will ask you to complete the various WealthMe forms, eg ‘WealthMe change of agency form’ etc FOR EACH PRODUCT PROVIDER.
Example of what you could get back if you change your agency to Wealthme
eg £100,000 EIS arranged with an execution only broker.
The trail commission could be 0.5% per annum, therefore a £100,000 investment, a trail commission of £500 per annum will be paid out.
Since the 1st of February 2023, the FCA has banned any incentives to invest for EIS/IHT investments. Therefore an execution only broker or an IFA can no longer rebate this trail commission back to the investor and will keep the payment for themselves eg £500 per annum.
Some of these providers pay the trail commission for up to 10 years (which is dependent on the investment being kept for the full term).
However, if you transfer the agency to WealthMe and the product provider agrees to continue to pay the trail commission to us, we will then rebate 65% back to you eg £325 per annum.
Any trail commission we receive will be paid to the recipient in April/May based on the amount received in the previous year. All trail rebates will be paid net of basic rate tax and are to be treated as taxable income by the recipient as stipulated by HMRC.
WARNING – Please read all of the product documentation on the product providers website before proceeding. We have provided the above information in good faith, however, this could be out of date, therefore please always refer to the providers website for the most up to date information.