Changing CGT could be a bigger disaster for the UK financial services industry than the Northern Rock scandal, Premier Wealth Management warns. Managing director Adrian Shandley says if the CGT changes go ahead, he can envisage a mass exodus from insurance bonds.

Hysni Kaso, IFAonline.co.uk – 29 November 2007

Shandley noted insurance companies heavily rely on these bonds and could even “go to the wall” if there are huge consumer outflows.

“The CGT changes could destabilise the whole life and insurance bond market,” he says.

“The simple fact is if there is a more tax efficient alternative out there, why would anyone stay in insurance bonds.

“The ultimate conclusion is that if you find an insurer or a couple of smaller insurers who depend on this bond business in trouble, it will solely be the Government’s fault.

“Unlike Northern Rock which was out of his control; this will be all Alistair Darling’s own making.” – full article