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Members of Britannia Building Society are in line to receive a total of more than £2 million in tax rebates, following a successful 'fairness' challenge to HMRC that has resulted in a rule change
The case arose earlier this year, when HMRC deemed that £51 million of bonuses to 313,000 Britannia members with ISAs and child trust funds (CTFs) were taxable, despite relating to accounts that enjoy tax-free status.
The alteration of HMRC rules means the building society's annual loyalty windfall will not be taxed when paid out to ISA and CTF holders in future. This year's bonus recipients will enjoy a reimbursement of tax after HMRC agreed to backdate its ruling to February 2007.
Britannia is also planning to introduce a tax-free account into which members can pay their Britannia Membership Reward without affecting their subscription limit.
