On July 16, 2012, the First-Tier Tribunal of the U.K. Tax Chamber issued a decision rejecting an appeal by hedge fund manager Sloane Robinson Investment Services Limited of a tax imposed on bonuses it delivered to its director-employees through a tax avoidance scheme.  This article summarizes the decision, including the factual findings, the parties’ arguments and the Tribunal’s legal analysis.  This article also provides insight on what the decision means for tax and compensation structuring for U.K. hedge fund managers.