Reported by Alistair Gray and Richard Milne

Denmark’s tax authority accused trader Sanjay Shah’s hedge fund of masterminding a “meticulously pre-planned” tax fraud on Monday, at the opening of a trial described by an English judge as one of the most complex to hit London’s courts.

Lawyers acting for the Danish Customs and Tax Administration (Skat) told the High Court that dozens of defendants led by Shah’s hedge fund Solo Capital Partners conducted a fraud over three years that netted them a total of about £1.44bn in dividend tax refunds.

The case is part of the sprawling “cum-ex” scandal in Europe, in which authorities in several countries claim to have been duped into refunding withholding taxes on dividends that had never been paid in the first place.

The civil case is being heard at the same time as a criminal trial against Shah in Denmark that began last month, after he was extradited from Dubai to face charges. Danish prosecutors have alleged that Shah, who is also a defendant in the High Court case, was the mastermind of a scheme that received more than DKr9bn ($1.3bn) in such refunds. He has denied wrongdoing.

Investors based outside Denmark who hold shares in Danish companies are subject to 27 per cent withholding tax on dividend payouts, and can apply for a tax rebate in some circumstances. 

Skat argues the defendants did not hold shares in the Danish companies and so their applications for refunds over the period, between 2012 and 2015, were unlawful.

Read full report: https://www.ft.com/content/128a9849-bedb-454d-a109-e19814c74166