The AAIB studied camcorder footage filmed by Mr Duncan before the crash
Former rally world champion Colin McRae's flying licence was out of date when he crashed his helicopter in woodland near Lanark in September 2007.
An Air Accidents Investigation Branch (AAIB) report into the tragedy found no cause could be positively determined.
Colin, 39, his son Johnny, five, and two family friends were killed when the Squirrel helicopter came down.
The parents of six year-old Ben Porcelli, who died, said it was evident that "unnecessary risks" were taken.
The accident report said that Mr McRae had been "undertaking a demanding manoeuvre" prior to the crash.
It also said that a phenomenon that gives the impression that the aircrafts controls are jammed may have led to a significant deviation in the flight path that Mr McRae was trying to recover from.
The report said disorientation, misjudgement, distraction, or other factors, may have led to this deviation.
Graeme Duncan, 37, died along with Ben Porcelli, and the rally star and his son, in the crash on 15 September 2007.
They had been returning to the landing strip at the McRae family's home after a short trip to a friend's farm.
In a statement, Mark and Karen Porcelli said: "Most of the flight was captured on video and it is clearly evident that unnecessary risks were taken and that the accident was completely avoidable."
he report said that Mr McRae's five-year flying licence had expired in February 2005 and he was also not authorised to fly the type Eurocopter Squirrel helicopter he was operating as his "valid type rating" had lapsed in March 2007.
It added: "The investigations into the pilot's licensing history revealed several cases, between 2004 and the time of the accident, of non-compliance with existing regulations."
TThe AAIB said that when Mr McRae had flown from Scotland to London in March 2006 he would have known his type rating had expired since the purpose of the flight was to meet with an examiner to renew it.
Speaking on behalf of the McRae family, Colin's father Jimmy said: "The AAIB report, in line with the findings of our own experts, has been unable to reach any firm conclusions on the accident and it is therefore extremely difficult to come to terms with the fact that we will never know the actual cause of the crash."
The McRae family's solicitor, Peter Watson, said: "We acknowledge that the report recognises the fact that, whilst Colin's licence was out of date, this was not a contributory factor in the accident."
A video recording taken on a camcorder by the passenger, Mr Duncan, was recovered from the crash scene.
Investigators viewed the five minutes of footage in an attempt to piece together what happened moments before the crash.
Ben Porcelli and Graeme Duncan also died in the crash
The helicopter's main rotor disc struck a fir tree about 30ft below its top as it flew at high speed and low height through Mouse Water Valley near Lanark.
The AAIB said Mr McRae could have been trying to recover from this and "attempting to arrest a rate of descent".
The report went on: "In attempting to manoeuvre low in the valley, the pilot placed his helicopter in a situation in which there was greatly reduced margin for error, or opportunity to deal with an unexpected event."
The investigation highlighted something referred to as the "servo transparency phenomenon" which the Eurocopter company, who made the helicopter, has advised "may give a pilot who is not aware of this phenomenon an impression that the controls are jammed".
The report concluded: "Servo transparency may have been a factor in this accident."
The AAIB said that a birdstrike, the dropping of a camcorder in the helicopter and possible interference with the controls by the front-seat passenger, Mr Duncan, could not be ruled out as contributory factors.
The report made four safety recommendation including a tightening of licensing and proficiency check procedures.
It also recommended that Eurocopter reviewed its information and advice about the servo transparency phenomenon.