The Financial Conduct Authority (FCA) has issued the largest fine so far in its targeting of cum-ex trading cases, imposing a £2m penalty on TJM Partnership for failing to ensure it had effective systems and controls to identify and reduce the risk of financial crime and money laundering in its business.
Adam Craggs, Head of Tax Disputes Resolution at RPC, said: ‘The FCA is sending a clear message to firms which were embroiled in Europe’s largest tax scandal that the FCA expect proactive compliance, a robust internal investigation and enhancement of systems and controls.
‘This decision also serves as a timely reminder that businesses should ensure that they have in place appropriate systems and controls in relation to financial crime risks and their compliance obligations, particularly given that it can only be a matter of time before HMRC bring a prosecution for failing to prevent tax evasion under the Criminal Finances Act 2017.’
As the FCA explains: ‘Cum-ex trading involves trading of shares on or just before the last cum-dividend date. If in a suitable jurisdiction this can then allow a party to claim a tax rebate on withholding tax, sometimes without entitlement.’
The Financial Conduct Authority (FCA) has issued the largest fine so far in its targeting of cum-ex trading cases, imposing a £2m penalty on TJM Partnership for failing to ensure it had effective systems and controls to identify and reduce the risk of financial crime and money laundering in its business.
Adam Craggs, Head of Tax Disputes Resolution at RPC, said: ‘The FCA is sending a clear message to firms which were embroiled in Europe’s largest tax scandal that the FCA expect proactive compliance, a robust internal investigation and enhancement of systems and controls.
‘This decision also serves as a timely reminder that businesses should ensure that they have in place appropriate systems and controls in relation to financial crime risks and their compliance obligations, particularly given that it can only be a matter of time before HMRC bring a prosecution for failing to prevent tax evasion under the Criminal Finances Act 2017.’
As the FCA explains: ‘Cum-ex trading involves trading of shares on or just before the last cum-dividend date. If in a suitable jurisdiction this can then allow a party to claim a tax rebate on withholding tax, sometimes without entitlement.’
