Premium problem

Readers may have seen the compensation payments now being made in respect of Equitable Life policies. We have two clients who have personally received payments with an assurance from the compensation scheme that these are not taxable.

In both cases these payments are in respect of a perceived diminution of their actual pension funds so we are a bit foxed as to why they are being made personally and not to the trustees of the funds. Can readers shed any light on this?

One of these clients has suggested to us that though he had tax relief for his contributions at the time now that the rest of them have been lost should he not have some further tax relief?

His view is that if say he had paid a premium £1 000 he would have received £400 tax relief. On the basis...