The Financial Reporting Council (FRC) is to investigate The Cup Trust in a bid to discover whether there has been any misconduct with respect to the establishment and operation of the charity and any related tax planning issues, both of which have proved highly controversial.

The Cup Trust had an income of £177m but gave just £152,292 to good causes as part of a suspected abuse of the gift aid tax rules, according to a highly critical report on the charity's operations by the National Audit Office (NAO).

HMRC won a case at First Tier Tribunal that the charity was a disguised tax avoidance scheme, and Cup Trust's claim for payments of £46m in gift aid relief was refused.

Subsequently the Charity Commission announced an inquiry into its operations in April, which has yet to complete.

The Commission's own handling of the Cup Trust's affairs, and the charity itself, were strongly criticised by the Public Accounts Committee in a report which said its approach to regulation and enforcement lacked rigour.

The scheme was promoted by a tax advisory partnership called HNW Tax Advice Partners run by two partners, Matthew Jenner and Anthony Mehigan. Jenner was also a director of the corporate Trustee, Mountstar (PTC) Limited, although he resigned following the Charity Commission's investigation. Mountstar was an entity based in the British Virgin Islands.