Alex Gerko, one of the UK’s largest taxpayers, has lost his legal battle challenging a British government decision that ordered him to pay income tax rates rather than corporation tax on earnings from trading foreign currencies at London hedge fund GSA Capital, according to a report by MarketWatch.
Gerko had appealed against a ruling by the UK’s tax authorities, which required him to pay up to 45% income tax instead of 19% corporation tax on earnings from high-frequency trading at GSA Capital. However, the Court of Appeals dismissed Gerko’s appeal, rejecting his argument that payouts to the firm’s traders should be taxed at the lower rate due to their distribution via an internal fund and deferred payment plan.
Under the disputed plan, 50% of the profits generated by Gerko’s team at HFFX, GSA Capital’s high-frequency currency trading unit, were invested in an internal fund, which then made deferred payouts to traders over three years. In 2010, HFFX was restructured into a limited liability partnership, reclassifying its traders as self-employed professionals rather than employees.
Gerko and his current firm, XTX Markets, which he founded in 2015 and now employs over 200 people worldwide, did not respond to MarketWatch’s requests for comment on the court’s decision.
Gerko, who began his finance career at Deutsche Bank after earning a PhD from Moscow University, before joining GSA Capital in 2009, has seen his net worth nearly double in recent years to $11.7bn, according to the Bloomberg Billionaire Index. In 2023, the Sunday Times named him as the UK’s top taxpayer, reporting that he paid £664.5m to HMRC that year.
