Update for SDLT Policyholders

In June 2021, Quest wrote to all known beneficiaries of policies in relation to a SDLT mitigation planning insurance scheme underwritten by Elite Insurance Company Limited (in administration) (“Elite”) regarding certain claims that had been made under those policies. Quest’s update noted that, at that time, the UK Financial Services Compensation Scheme (“FSCS”) was in the process of determining whether the relevant policies were eligible for FSCS protection.

The FSCS has recently confirmed that claims made under these policies are not eligible for FSCS protection. That is primarily because the FSCS has found these policies to be contrary to public policy and therefore void, on the basis that the policies were “an integral and critical constituent component of schemes deliberately designed to facilitate tax avoidance”. As such, the policies are unenforceable and no claims can be advanced under them.

Elite’s administrators are of the view that the public policy considerations identified by the FSCS would also prevent any claims under these policies from being successfully advanced against Elite. Accordingly, Elite’s administrators will decline any claims made under these policies.

However, policyholders who paid premium to Elite in respect of these policies may submit a claim in Elite’s administration for reimbursement of that premium, and will be invited to do so in due course. For completeness, please note that the FSCS has confirmed that it will not compensate claims for return of premium.