Danish tax authority wins battle to pursue $1.8 bln UK 'cum-ex' case

Danish tax authority SKAT has won a battle to pursue British hedge fund trader Sanjay Shah and dozens of companies over an alleged 1.44 billion pound ($1.8 billion) tax fraud, after top British judges ruled the case could be brought in English courts. The UK Supreme Court on Wednesday said the case was admissible because it turned on allegations that Danish tax refunds had been extracted by fraudulent misrepresentation, orchestrated mainly through entities in England.

Danish tax authority SKAT has won a battle to pursue British hedge fund trader Sanjay Shah and dozens of companies over an alleged 1.44 billion pound ($1.8 billion) tax fraud, after top British judges ruled the case could be brought in English courts.

The UK Supreme Court on Wednesday said the case was admissible because it turned on allegations that Danish tax refunds had been extracted by fraudulent misrepresentation, orchestrated mainly through entities in England. Appellants, including Shah, had argued the case should be blocked because it amounted to a foreign state attempting to enforce its domestic tax laws in English courts, which breaches a well-established principle known as the "revenue rule".

"... the substance of (SKAT's) claims is that the appellants defrauded SKAT to obtain refunds to which they were never entitled and SKAT has brought its claims as a victim of fraud. "Accordingly, SKAT's claims fall outside the revenue rule," the judges said.

The ruling, announced as the first criminal trial over the so-called "cum-ex" scandal opened in Copenhagen, allows one of the biggest civil litigation claims to be heard in England to proceed. ($1 = 0.8133 pounds) ($1 = 6.9867 Danish crowns)