Court Awards 223,000 to 96-year-old in Tax Advice Dispute

In a rare move, the High Court has overturned a Financial Ombudsman decision and awarded a 96-year-old £223,000 in compensation for financial advice given 16 years ago.

The Ombudsman deals with complaints about many areas of financial services, and can award up to £150,000. Its decision is normally the final word on complaints.

However, a recent Manchester High Court judgment overturned an Ombudsman decision and ordered Zurich, the insurance company, to pay compensation over incorrect financial advice that had claimed to reduce inheritance tax.

Angela Lenderink-Woods was advised by Huw Davies, a financial adviser at Allied Dunbar, a firm acquired by Zurich in 2001, to transfer £567,700 into three Allied Dunbar investments, including a trust and offshore bond.

As a "tied" advisor, Mr Davies could only recommend Allied Dunbar schemes, and if nothing was suitable he was meant to suggest that she see an independent financial advisor instead.

Mrs Lenderink-Woods' family became concerned when she suffered a stroke in 2009 and they queried whether the advice would cut a future inheritance tax bill.

At the High Court, Mr Justice Norris, said that "every tax-based reason that Mr Davies gave for his advice was wrong."

He awarded £233,000 of damages based on "unnecessary charges" levied by Mr Davies which had cancelled out all investment growth.

If you need advice or assistance related to inheritance tax planning, call our solicitors today. Speak to us in confidence on 01625 522 429.

Richardson Law

Inheritance Tax Planning