Not upheld: mis-selling / incorrect tax advice on bond surrender complaint against Lumin Wealth Limited

Decision detail

Summary

Mrs A complained that Lumin Wealth's adviser told her in 2020 that splitting the surrender of an offshore investment bond across two years would result in no tax liability. After making partial surrenders in April 2020, she received an HMRC notice in January 2025 indicating she owed tax and paid £8,490 (later partially refunded). The ombudsman examined email evidence showing the adviser had discussed chargeable gains calculations with the bond provider and confirmed clients were aware of income tax liability. Finding no documentary evidence supporting Mrs A's account that she was told there would be no tax, and noting the adviser's apparent comprehensive knowledge of tax implications, the ombudsman concluded there was insufficient evidence on balance that Lumin acted incorrectly and did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman balanced Mrs A's recollection against documentary evidence. While acknowledging that discussions about splitting surrenders across years likely occurred (as a tax management strategy), the ombudsman found no documentary evidence that Mrs A was told there would be no tax due. The adviser's email to the bond provider stating that clients had been made aware of the income tax liability, combined with the adviser's apparent comprehensive knowledge of tax implications, suggested the adviser would not have made such a statement had he actually told Mrs A there would be no tax. The ombudsman concluded there was insufficient evidence on balance to show Lumin acted incorrectly.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website