IFG to appeal UK unit's biofuel scheme tax fine
IFG's UK pensions unit James Hay is facing a £1.8m (€2.1) tax fine from British authorities, over investments made in an unregulated biofuel scheme.
The company said it will appeal against the decision.
Dublin-based IFG said HMRC, the UK tax service, is investigating investments of about £55m by 500 investors in a scheme known as "Elysian Fuels", between 2011 and 2013 through accounts administered by James Hay.
"James Hay did not advise investors in relation to these investments; it acted solely as pension administrator," the company said in a statement.
IFG said James Hay has received assessment notices for sanction charges totalling £1.8m.
The charges have been appealed and are the subject of ongoing discussions with HMRC, the company said.
In total around £200m was invested in the Elysian Fuels scheme, which was marketed as a scheme for investing in renewable energy projects in the UK and the US, with a minimum investment of £50,000.
The information was included in an interim management statement from the Dublin-headquartered but UK-focused financial services company.
IFG's main UK businesses are James Hay, which provides services for retirement wealth planning and pension administration and Saunderson House, which provides financial planning and investment advice.
Overall, the business reported growth of 5pc in assets under administration in the first three months of the year to £28bn (€33.2bn), mainly in James Hay.
Total assets under administration and advice increased 17pc compared to 31 March 2016.
James Hay added 1,600 new clients and £800m in assets in the period, while Saunderson House added 86 new clients and £100m in assets under advice.
The company said lower UK interest rates had hit revenues and profits by £1.6m compared to the first three months of the year. "Changes to interest rates in 2016 impacted the group revenue trajectory and masked the underlying performance of the business short-term, but this is being mitigated whilst we continue to drive improvements to our propositions and operating capability," said group CEO John Cotter.
He said the cost base in James Hay will normalise in the second half of the year, as efficiency gains from investment filter through and that pricing changes taking effect in the second half of the year will boost revenue and margins.