Billionaire Michael Platt’s hedge fund-turned family office BlueCrest Capital has largely lost a legal battle at the Court of Appeal in London, meaning that partners at the firm are now are liable to pay a higher rate of tax on part of their remuneration, according to a report by the FT.

The case relates to a 'special capital' pay plan dating back to 2008 which was introduced to help the UK-headquartered firm retain staff. According to the court ruling, that scheme should be subject to income tax rather the lower rate corporation tax as BlueCrest originally intended.

The Partner Incentivisation Plan (PIP) scheme first attracted the scrutiny of the UK’s tax authority in 2010, according to the ruling that was handed down last week.

In the court judgement, Sir Launcelot Henderson, one of the presiding judges, wrote that “as a matter of law, the PIP awards had the character of income”, adding: “Partners who received final PIP awards are liable to income tax."