Compensation will start to come through to Standard Life Sipp investors in Catalyst, the failed ARM life settlement firm, after a tax issue was resolved.
Catalyst was placed in default by the FSCS last year and with compensation due, a hold up came about in September.
FSCS said it was working with Standard Life to ensure that Standard Life Sipp members with eligible claims against Catalyst were not subject to any adverse tax liabilities.
Investors could not be paid compensation until the matter was addressed.
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But The Financial Services Compensation Scheme said this week it has received clarification from HMRC about the tax implications for Standard Life Sipp members with eligible claims against Catalyst.
In a statement the FSCS said: "As a result, FSCS, Standard Life and HMRC have now agreed a process for making payments to affected claimants. The agreed process will be for Standard Life (as the Sipp Trustee) to provide FSCS with a full legal assignment of the ARM assets. This assignment will be made at nil value and on the basis that any recoveries are repaid to the Sipp rather than directly to the investor.
"The amount of compensation paid and costs incurred in pursuing the assigned rights will be deducted by FSCS from the recoveries before being paid to the Sipp."
Claimants will need to grant consent to Standard Life for them to provide FSCS with a full legal assignment of the ARM assets.
FSCS will contact affected claimants to obtain the required consent once its initial assessment of claims has been completed.
Scheme officials said this would enable it to pay eligible claimants and any recoveries received in the future will then be paid into the investor's Sipp.