Summary
This case represents the long-awaited verdict in a legal battle which has run for almost a decade and is one of the highest value civil cases ever heard in the UK. It is undoubtedly a huge blow for the Danish tax authorities, but demonstrates that if legal loopholes are left open, then they can be exploited, a lesson they have learned at great financial cost.
Background
In October 2025, Denmark’s tax authority, Skatteforvaltningen (‘SKAT‘) lost its £1.44 billion London based lawsuit against Solo Capital Partners and others (the ‘Defendants‘), which first began in 2018. SKAT argued that large amounts of money had been falsely claimed in tax rebates as part of what are now known as “cum-ex schemes“.
Nothing is too good to be true.”
Ernest Holmes
SKAT alleged that Solo Capital Partners (‘Solo‘), run by Sanjay Shah, was responsible for most of these claims. Solo was a hedge fund established in 2009 by Mr Shah, with the head office in London and a further office in Dubai.
Cum-ex schemes
Cum-ex schemes first appeared in the aftermath of the 2008 crash and steadily spread across Europe. They are transactions where shares were sold from one party to another just before the payment of a dividend, known as ‘cum dividend’, effectively with dividend, but delivered to the other party afterwards, so ex-dividend.
The timing of these transactions was designed to exploit confusion over who actually owned the shares at the time of the dividend being paid out to shareholders. By using this timing delay, both parties were able to claim rebates on withholding tax. This tax was initially paid once, when the dividend was first issued, and it is clear that these schemes were carried out with the sole purpose of generating multiple refunds of a tax which had only been paid once.
From this starting point, those involved in such schemes created ever more elaborate trades to exploit this arrangement, costing taxpayers in Europe billions financially. Whilst many European countries were targeted to exploit this arrangement, Solo focused primarily on Denmark from 2013 onwards.
Outcome
The Judge ruled that the 4,170 tax refund claims were valid under Danish law. After examining all the evidence, it was concluded that SKAT had not been misled by any “misrepresentation” from the Defendants into making the payments. The Judge noted that whilst greed had undoubtedly played a part in the Defendants’ actions, this did not mean that what they had done was misleading or outside of what was permitted under the legislation at the time.
It was concluded that the situation had arisen due to the Danish tax authority’s controls for the assessment and payment of dividend tax refund claims being “so flimsy as to be almost non-existent”. This lack of regulation had allowed these schemes to flourish. The Judge added that the Defendants were “able to and did help themselves to a fortune because SKAT’s processes were so limited”. The conclusion being that insufficient legislation and controls were at fault here, rather than the Danish government being the victim of fraud.
Setting an example
It was noted that SKAT effectively had “unlimited resources” in the pursuit of this matter, being backed by a sovereign state. It was clear that there was a desire to “set an example to the world” that such actions would not go unchallenged. The case was also described as being “politically as well as financially motivated”. Nevertheless, despite such vast resources, the Judgment has been an indisputable victory for Mr Shah and the other Defendants.
Expert Evidence
There were a number of Expert Witnesses called to give their views on the principles involved in the case. Professor, Dr.Jur Frederik Waage gave unchallenged expert evidence on the fact that the nation state of Denmark is a constitutional monarchy. Only SKAT put in expert evidence from a forensic accountant, Mr Jens Ringbӕk of Deloitte Denmark, whose evidence was also unchallenged.
However others came in for severe criticism where Mr Justice Baker said in paragraph 397. “All three experts, in differing ways, did not provide properly balanced written reports, uninfluenced by the fact that they were instructed, respectively, by SKAT (Mr Wade), the DWF Ds (Mr Sharma), and the Shah Ds (Mr Bird). This was most evident in the case of Mr Wade, much of whose written work was argument rather than expert evidence. Regrettably, in my view he carried into his oral evidence the same tendency and approach, to think first of how he should be putting the case for SKAT. I concluded, with regret, that he has become compromised by the nature and extent of his involvement for SKAT in its global litigation effort, such that he finds it difficult not to think and express himself as an advocate for SKAT’s position. He has, I think, lost detachment from the partisan interests of SKAT as his instructing client, and that left me unhappy to accept views of his that, on analysis, were genuinely matters of expert opinion where his views were not shared by at least one of Mr Sharma or Mr Bird.“
In paragraph 398. “In Mr Sharma’s case, my concern was less pronounced. There was in his case an unwelcome tendency, in writing, to fail to express qualifications or set out a complete expression of his view, such that the absence, or narrowness, of any real difference of expert opinion between him and Mr Wade was obscured, and the impression might have been gained from reading his reports that there was nothing at all unusual or contrary to typical market practice about the Maple Point Model trading (which was Mr Sharma’s focus).“
Next steps
SKAT was quick to issue a statement that they plan to appeal this decision and that they “strongly disagreed” with the outcome of the case. They are no doubt encouraged by the decision in the US in February 2025, where a US jury awarded $500 million to SKAT following the first US civil trial over cum-ex trades.
Simultaneously, Mr Shah, who is currently serving twelve years in prison following a successful parallel criminal conviction by the Danish authorities, has stated that he intends to appeal this conviction, in view of the outcome in this case.
What seems clear is that this is not the end of this particular legal saga and it will be very interesting to see how both of these appeals progress.
Otherwise known as: Skatteforvaltningen (Danish Customs and Tax Administration) v Solo Capital Partners and Others [2025] EWHC 2364 Comm
Link: Skatteforvaltningen v Solo Capital Partners LLP & Ors [2025] EWHC 2364 (Comm) (02 October 2025)
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