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Odey Asset Management loses partnership pay plan tax battle with HMRC

Odey Asset Management loses partnership pay plan tax battle with HMRC
  • The scheme placed executives into a special purpose vehicle called Partners Special Capital Limited and permitted profits to be deferred for a span of two to three years.


  • Odey AM is expected to appeal the decision.

London-based Odey Asset Management has reportedly lost a tax argument with HM Revenue & Customs which could make former as well as present company executives liable for the payment of additional tax bills. The company and 17 executives have been involved in the litigation with HMRC regarding a collaborative payment plan that ran over a period spanning from tax year 2011-12 to tax year 2015-16.

According to sources close to the matter, the scheme put executives into an SPV (special purpose vehicle) known as Partners Special Capital Limited and then disbursed shares to these members after a duration of two to three years on the condition that they hit specific targets.

This meant that the scheme permitted profits, that would have been paid to the involved executives, to be deferred for a period of two to three years until the meeting of certain targets. While Odey himself was not a participant of the plan, it did involve Tim Bond, and James Hanbury, two high profile managers at the hedge fund.

As per reliable sources, the plan was established owing to the regulatory pressure felt by executives, when regulators were keen to move the financial services market away from instant cash bonuses in light of the international financial crisis. HM Revenue & Customs later raised issues with regards to the plan and stated that it did require the payment of income tax.

While Judge Harriet Morgan ruled that the plan resulted in an additional income tax liability, she concluded that scheme members were not subjected to income tax during the tax year in which they were presented the shares.

As per a source from the Financial Times, Odey Asset Management would appeal the ruling.

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Sunil Jha has been a part of the content industry for close to two years. Having previously worked as a voice over artist and sportswriter, he now focuses on writing articles for, across a slew of topics, ranging from technology to trade and finance. With a business-oriented educational background, Sunil brings forth the expertise of deep-dive research and a strategic approach in his write ups.