Not upheld: Investment mis-selling complaint against Westminster Wealth Management LLP

Decision detail

Summary

Mr G invested £50,000 in Future Fuels LLP, a BPRA tax relief scheme, in February 2013 based on advice from Westminster Wealth Management. After the investment, Future Fuels LLP changed its business plan due to EU Directive changes, and HMRC subsequently investigated Mr G's tax return. Mr G complained that the advice was unsuitable because he wanted no risk of HMRC challenge, was not informed his money might be used differently, was not told about the track record of individuals involved, and was not made aware of conflicts of interest until after deciding to invest. The ombudsman found the investment was not mis-sold, as Mr G was provided with clear risk warnings stating HMRC could challenge tax reliefs, the conflicts of interest were disclosed before completion, and Westminster Wealth could not have anticipated the EU Directive changes or their impact on the business plan.

The Ombudsman's reasoning

The ombudsman found no evidence supporting Mr G's claim that he explicitly required HMRC pre-approval, noting that HMRC does not pre-approve schemes and this was clearly explained in the literature provided. The risk warnings explicitly stated that tax reliefs could be challenged retrospectively by HMRC. The ombudsman noted Mr G had invested in a similar BPRA scheme the previous year on essentially the same basis without complaint. Regarding the track record of individuals involved, the ombudsman found that even if one individual had been involved in a scheme challenged by HMRC, this did not mean other schemes operated by that individual were under greater risk of challenge. On the use of funds, the ombudsman found Westminster Wealth had no reason to anticipate Future Fuels LLP would change its business plan, and such changes were outside Westminster Wealth's control. The conflicts of interest were properly disclosed before Mr G completed the investment, and he signed a declaration confirming his understanding.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website