Upheld: failure to properly account for tax position in discretionary investment management; inadequate consideration of client's CGT planning needs complaint against Brown Shipley & Co Limited
Financial Ombudsman decision DRN-6427108 of 2026-06-12T00:00:00+00:00. failure to properly account for tax position in discretionary investment management; inadequate consideration of client's CGT planning needs complaint against Brown Shipley & Co Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-6427108 |
|---|---|
| Decision date | 2026-06-12T00:00:00+00:00 |
| Firm | Brown Shipley & Co Limited |
| Product | Investment |
| Claim type | failure to properly account for tax position in discretionary investment management; inadequate consideration of client's CGT planning needs |
| Outcome | Upheld |
| Remedy | Brown Shipley to pay £2,208 redress as previously proposed. Additionally, 8% simple interest on the redress calculation from the date CGT was paid to HMRC until settlement date. If HMRC requires income tax deduction from interest, Brown Shipley must confirm this to Mr F and Ms N and provide a certificate for potential reclaim from HMRC. |
Summary
Mr F and Ms N complained that Brown Shipley failed to properly recognise their tax position before selling down their investment holdings in November 2022, resulting in a £7,346 CGT liability that could have been mitigated had they been able to sell a property as planned in the 2022/23 tax year. Brown Shipley upheld the complaint and proposed £2,208 redress, acknowledging the adviser should have accounted for their property sale plans. The ombudsman upheld the complaint and confirmed the proposed redress was fair, as it accounted for the possibility of spreading the investment sale and the impact of the delayed property sale on their CGT allowances across different tax years. No additional refund beyond the £2,208 was ordered, as the property sale would have triggered a CGT liability regardless.
The Ombudsman's reasoning
The ombudsman agreed that while a valid DFM arrangement was in place allowing Brown Shipley discretion over portfolio decisions, the firm should have established Mr F and Ms N's correct CGT position for 2022/23, including their intention to sell a property. Although Brown Shipley did not provide tax advice (which was excluded under the terms), it should have been mindful of the impact of investment decisions on their CGT allowances. The redress calculation of £2,208 was fair as it accounted for the possibility of spreading the sale to reduce the CGT impact and the delay to the property sale at the higher property rate, using the difference in allowances between tax years.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Brown Shipley & Co Limited, all decisions | 28 | 34% |
| Investment, all decisions | 13,970 | 35% |
Source
Read the original decision on the Financial Ombudsman Service website