Jamie Ritblat is among the UK’s most prominent property investors. His Delancey firm is invested in London’s biggest redevelopment projects: Elephant & Castle, Earls Court, and the former Olympic Village.
But the Conservative party donor and son of Sir John Ritblat is now also embroiled in a sprawling tax dispute with HM Revenue & Customs that has included Big Four audit and advisory firm EY.
At the centre of the dispute is a 2015 tax settlement amounting to just £400. Ritblat says the deal blocks HMRC from collecting further taxes on £141mn of carried interest profits paid by a Delancey trust to its employees.
The tax authority, as you can imagine, disagrees. It claims the 2015 settlement was made on the basis of misrepresentations. As a result, a lot of complex and expensive litigation is now playing out in London’s courts.
Ritblat has sued HMRC. HMRC has sued Delancey and is also suing EY, which negotiated the 2015 settlement. There are also proceedings in the tax tribunal involving Ritblat and Delancey.
We’ve been covering the cases over on FT.com. But for those who want to dig deeper, we have published below the underlying court documents that lay out the issues in more granular detail.
Careful comments that take heed of the fact these are live legal issues are welcome below. Emails to [email protected] are also welcome. The parties have previously commented as follows:
Delancey: “Unfortunately proceedings had to be brought against HMRC as they have breached the terms of an agreement in respect of an employee benefit trust settlement opportunity which they publicly initiated and offered to hundreds of employers and trusts. We believe that this agreement is valid and strongly reject the allegation that misrepresentations were made by the trust, its professional advisors and Delancey.”
HMRC: “Misrepresentations were made to us in 2015. Clearly, had appropriate disclosures been made, the settlement would not have been entered into. It is our duty to ensure everyone pays the right tax under the law, regardless of wealth or status.”
EY: “While it would be inappropriate to comment on ongoing legal proceedings, we strongly refute any suggestion of wrongdoing by EY and will vigorously defend the claim against us.”
Ritblat v The Commissioners For Her Majesty’s Revenue and Customs (BL-2021-000675)
— Amended Particulars of Claim
— Defence & Counterclaim
— Reply and Defence to Counterclaim (plus summary)
HMRC v Delancey Real Estate Asset Management Limited (BL-2022-000091)
— Particulars of Claim
— Order staying the case
HMRC v Ernst & Young (BL-2022-001186)
The claim was issued in July but has not yet been served. The High Court heard on Friday 11 November 2022 that HMRC intended to serve the case before a 28 November 2022 deadline. The action is referenced in HMRC’s skeleton argument for that 11 November hearing in Ritblat v. HMRC.