Money Covered: The Week That Was – 24 July 2026

Welcome to The Week That Was, a round-up of key events in the financial services sector over the last seven days.

The fifth episode of Season 4 of our podcast, Money Covered – The Month That Was, where the team looks at the Financial Conduct Authority's Vehicle Finance Redress Scheme Consultation, is now available.

To listen to this and all previous episodes, please click here

Headline development

"Home loan” IHT scheme upheld by Court of Appeal (13/07/2026)

In Elborne v HMRC [2026] EWCA Civ 894, the Court of Appeal has dismissed HMRC’s appeal concerning a pre-2006 “home loan” inheritance tax (IHT) planning arrangement under which a taxpayer sold her home to trustees of a life interest settlement in return for a promissory note, then gifted the note to a separate family settlement and continued occupying the property rent-free.

The Court held that, on the statutory scheme and the facts found, the trustees’ liability under the promissory note could reduce the value of the trust property for IHT purposes, and the anti-avoidance provisions relied on by HMRC did not apply to disallow the deduction. In particular, the Court rejected HMRC’s argument that the life tenant should be treated as having personally incurred the trustees’ debt. The Court also rejected HMRC’s attempts to recharacterise the outcome, finding that in the Court's view, the scheme "worked". The decision is fact and legislation sensitive and relates to transactions implemented in 2003. The outcome may have been different had the disclosure of tax avoidance schemes (DOTAS) regime and the General Anti-Abuse Rule (GAAR) introduced by the Finance Act 2013 been in place at the time that the scheme was used.

However, this is a landmark decision which may affect thousands of families who used the schemes. Firms who are supporting families who are battling HMRC in similar situations will welcome this development. HMRC is considering the decision and has not ruled out appealing to the Supreme Court.

To read the decision, please click here.

Tax Practitioners

Loan charge settlement scheme: July 2026 regulations set the offer process, calculation methods, conditions and IHT consequences

Regulations made on 14 July 2026 establish the detailed framework for the loan charge settlement scheme, coming into force on 5 August 2026, building on the main parameters in section 25 of the Finance Act 2026. The regulations require HMRC to make settlement offers to any person it believes is liable to pay loan charge amounts (income tax, NICs and late payment interest), unless HMRC reasonably suspects the person is or has been a promoter or introducer, or a director or shadow director of such a promoter or introducer.  

The regulations also set out how settlement offers must operate in practice. Offers must describe the amounts covered by the offer (which will cease to be payable if the offer is accepted) and must remain open for acceptance for 90 days (or 30 days for further offers). Settlement amounts are calculated using a primary method that attributes loan and arrangement amounts to tax years and applies reductions (subject to a cap), with an alternative calculation applying where the offer is made to a corporate employer.

HMRC may impose conditions on settlement offers, including requiring the offeree to pay additional qualifying amounts (amounts assessed by HMRC before 26 November 2025 or subject to an enquiry opened before that date, and deliberate and concealed inaccuracy penalties relating to disguised remuneration loans), to withdraw existing litigation, and to forgo repayment claims. Payments made before the settlement agreement must be credited against the settlement amount. The regulations also address inheritance tax (IHT), providing that certain unpaid IHT attributable to property used for making relevant loans and arising before the end of the period of three months from the date the settlement offer was made ceases to be payable, and that relevant loans are not treated as liabilities for IHT purposes under section 5(3) of the Inheritance Tax Act 1984. Practitioners should also note the transitional provision: qualifying offers made by HMRC before 5 August 2026 will be treated as settlement offers made under the scheme on 5 August 2026, and HMRC published guidance on the loan charge settlement on 17 July 2026.

To read more, please click here.

Regulatory developments for FCA regulated entities

FCA scrutiny of car finance claims advertising intensifies

UK regulators and enforcement bodies are continuing a coordinated crackdown on potentially misleading advertising relating to motor finance/car finance claims. The Financial Conduct Authority (FCA), working alongside the Advertising Standards Authority (ASA), Solicitors Regulation Authority and Information Commissioner’s Office has identified a further 170 adverts (spotted in June) that were considered misleading; these have since been removed or amended. This brings the total number of problematic adverts identified to date to 1,200.

The ASA has opened investigations into a number of law firms’ advertising campaigns. It is examining, in particular, (1) whether adverts are transparent about fees, (2) make clear that consumers may be able to pursue claims for free via alternative routes (including any relevant FCA scheme), (3) avoid exaggerated or unsubstantiated compensation figures, and (4) do not mislead consumers through “free checker” tools or endorsement-style marketing. The ASA is also using AI tools to monitor advertising and identify potential compliance issues.

The FCA reports ongoing supervisory and enforcement interventions, including additional voluntary requirement agreements (VRQs) with claims management companies to stop or change marketing activity (12 VRQs in the past year, including two new agreements). The FCA has also taken action against specific marketing practices such as the unauthorised use of FCA branding and has issued alerts regarding unauthorised firms promoting regulated claims management activity.

To read more, please click here.

FCA publishes findings on financial crime controls at asset management and alternatives firms

On 22 July 2026, the FCA published its findings from a review of financial crime systems and controls at firms in the asset management and alternatives sector. In 2025/26, the FCA engaged with 242 asset management and alternatives firms to gather their assessments of the financial crime risks they face and to understand their control frameworks.

The FCA found that some firms were exposed to heightened financial crime risks, especially those firms active in private markets. These risks increased where there were complex ownership structures that can cross jurisdictions, high-risk customers, and international fund flows. The FCA noted that firms active in private markets were more likely to exhibit these characteristics than firms undertaking other activities. 

The FCA looked at control risks and found that most firms showed they understood legal and regulatory requirements through their control framework, but others appeared to underestimate their inherent financial crime risks, resulting in an informal approach to evaluating and managing them.  

The FCA has encouraged firms to review their own business models against its findings and address any gaps in their financial crime control frameworks. The FCA will monitor firms as part of their supervision to ensure they are considering these findings.

To read the FCA findings, please click here.

Wider Implications Framework's annual report for 2025/26 published

On 21 July 2026, the FCA published the Wider Implications Framework's (the "Framework") annual report for 2025/26. It sets out the past year’s collaboration between the Framework’s members, being the FCA, the Financial Ombudsman, the Financial Services Compensation Scheme, the Money and Pensions Service and the Pensions Regulator.

The members agree that the Framework's core objective should stay focused on helping them identify areas where co-operation is needed and then maintaining oversight of their engagement. The members believe that streamlining how the Framework operates is the best way to deliver this. The changes agreed include:

1. An annual executive and chair meeting setting the engagement priorities for the year ahead and reviewing member engagement over the previous year. Members will focus on horizon scanning and aligning engagement across members’ business strategies.
2. Engagement will be tracked at working level, with reporting against executives and chair objectives. The Framework's directors will consider the report twice a year, with the executives and the chairs maintaining oversight.
3. The Framework will retain flexibility to address emerging issues through ad hoc meetings.

These changes are being implemented before the new Framework cycle starts in November 2026. Stakeholders are invited to provide feedback on the Framework and the annual report.

To read the Annual Report, please click here.

FCA's consults to end double-Dipping

The FCA has proposed reforms to improve transparency in investment charges, with a particular focus on eliminating the practice of "double-dipping" on client cash. Under the proposals, investment platforms will no longer be permitted to charge customers fees on cash balances while simultaneously retaining the interest earned on those funds. Firms must instead choose either to earn revenue through transparent fees or by retaining interest, ensuring consumers clearly understand how their money is being used.

For investment firms, this represents a significant shift in revenue models, particularly for platforms that have benefited from higher interest rates in recent years. Firms may need to redesign pricing structures, improve disclosure processes, and invest in systems that clearly communicate charges and interest arrangements. While these changes could reduce profit margins in the short term, they are expected to strengthen consumer confidence and align business practices with the FCA's Consumer Duty.

Click here to read the full consultation, which closes on 21 August 2026.

With thanks to this week's contributors: Lauren Butler, Haiying Li, Damien O'Malley, Daniel Parkin, Dorian Nunzek, Brendan Marrinan.

If you have any queries please do get in contact with a member of the team, or your usual RPC contact.