Senior bankers participated in historic UK tax scheme
There was a time in the distant past when banking pay was not only much higher than it is now, but when it was possible to mitigate the tax levied on that pay. Various senior people in financial services took advantage of the opportunity.
They included Simon Smith, Morgan Stanley's current co-global head of investment banking, Martin Gilbert, the co-founder and former CEO of Aberdeen Asset Management, and Babak Eftekhari, the former head of talent acquisition at Eisler Capital.
The scheme, which was initiated in 2011 and named Cobalt Data Centre II, sought to benefit from Enterprise Tax Allowances to receive tax credits. The Financial Times reported in 2021 that 700 people invested in the Cobalt schemes with an average investment of just under £120k and that they expected to receive a 67% profit almost as soon as the investment was made. 402 original partners became investors in Cobalt Data Centre II.
Alongside, the senior finance figures, investors in the scheme included comedian Jimmy Carr and footballer Wayne Rooney. Carr resigned from the scheme in 2016, stating that he'd "met with a financial advisor, and he said to me, 'Do you want to pay less tax? It's totally legal'. I said 'Yes'." Smith, Gilbert, Eftekhari, Wayne Rooney and others are still listed as participants in the scheme.
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