Odey adopted a remuneration policy under which a proportion of Odey's profits which could otherwise have been allocated to and received by certain of the individual members in that year were subject to a "deferral" mechanism whereby those members could receive relevant amounts only over two to three years if certain conditions were satisfied. In each relevant tax year, Odey calculated and paid the relevant profit shares to a corporate member of Odey, Partners Special Capital Limited (PSCL), which was specifically set up to facilitate the operation of the plan and had no other purpose.
The Tribunal has held that the Odey members should not be subject to income tax on partnership profits in the year of allocation in respect of the 'shares' awarded to them in that year, nor in respect of sums received in later years on reallocation of special capital. However, the Tribunal held that the awards to the individual members were taxable as miscellaneous income in the year of receipt under s.687 ITTOIA 2005.