FCA and PRA publish Decision Notices given to former CEO who paid excessive remuneration to his wife to reduce his tax liability

The UK's Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) have decided to ban and fine Stuart Malcolm Forsyth, the former CEO of a small mutual insurer, £78,318 and £76,180 respectively. The regulators’ respective decision-making committees found, following a joint investigation, that between February 2010 and July 2016 Mr Forsyth transferred excessive amounts of his own remuneration to his wife to reduce his own tax liability and took steps to conceal that arrangement.

As CEO of Scottish Boatowners Mutual Insurance Association (SBMIA), Mr Forsyth paid his wife a proportion of his own salary in compensation for providing some out of hours administrative support and occasional hospitality at home. Up until 2010, Mrs Forsyth was paid between £5,000 and approximately £10,000 per annum, which was not obviously unreasonable for the work she was undertaking. 

From 2010, Mr Forsyth transferred increasing amounts of his salary, and in most years all or part of his own bonus, to Mrs Forsyth in order to reduce his tax liability.

Full FCA media release

The FCA’s Decision Notice for Mr Forsyth