Despite his best efforts, Crispin Odey sure has been testifying in court a lot lately. First, he acknowledged being a bit of a creep in seeking to break his solemn marriage vows with a woman roughly half his age in a successful effort to fend off criminal charges that he had sexually assaulted the same. And now, this:
Odey testified to the tribunal that the tax saving was “incidental to the whole thing” and that its importance was fulfilling regulatory wishes on deferred pay.
The whole thing being Odey Asset Management’s post-financial crisis bonus plan, under which a handful of top executives at the hedge fund had payment of their share of the firm’s profits deferred for a few years pending their achievement of performance targets. But while the tax savings inherent in such a plan were “incidental” to Odey, they were not to H.M. Revenue & Cutoms, which is kind of a stickler for people paying taxes on their bonuses whenever and however they’re getting them.
Judge Harriet Morgan of the First Tier Tribunal Tax Chamber ruled that there was additional income tax liability. She ruled that members were subject to income tax when their shares were paid out after targets had been met…. The miscellaneous income tax rule, she said, “is deliberately widely drawn as something of a flexible ‘sweep up’ provision in order to capture income which ought to be taxable”.
Of course, it was also incidental to Odey because it doesn’t really impact him at all.
The remuneration plan was drawn up for senior staff in 2011, with Crispin Odey as the only exempt partner. “He has motivation enough to remain at his own firm, as the firm’s founder and majority shareholder,” according to the plan documents quoted in the ruling.