Odey Asset Management has lost a tax battle with HMRC over a staff incentive plan that could see current and former executives foot hefty tax bills.
The Financial Times first reported that 17 of the firm’s executives have been involved in litigation with the taxman over a partnership pay plan that ran between the 2011-12 and 2015-16 tax years.
Under the plan, executives were placed into a special purpose vehicle named Partners Special Capital Ltd which paid out profits as shares two to three years later if targets were met.
Judge Harriet Morgan of the First Tier Tribunal Tax Chamber ruled that scheme members were subject to income tax when their shares were paid out. These were allocated to them under rules relating to miscellaneous income.
However, Morgan concluded the scheme members were not subject to income tax in the tax year in which they were awarded the shares.
The remuneration plan was drawn up for senior staff in 2011, but did not involve the firm’s founder Crispin Odey (pictured). It did, however, involve high-profile Odey AM managers James Hanbury and Tim Bond.
It is understood that Odey AM is appealing the decision.
Odey AM declined to comment.
