Losing Northern Rock gambler wins on 50% tax by taking RAB dividend early

Hedge fund manager Philip Richards, who lost millions betting on Northern Rock, today saved £66,000 by bagging an early dividend payment to beat the looming 50% tax rate.

Richards, the founder and former chief executive of RAB Capital who gambled on the success of the bust Newcastle bank, will be paid an early dividend of £660,000 for his 28% stake in RAB.

The "second interim dividend" of 0.5p a share, brought forward to avoid the new top rate of tax coming in next month, comes on top of the 0.6p payout awarded last summer which earned Richards £792,000.

The latest dividend will be paid on 31 March, days before income tax for high earners is raised from 40% on 6 April.

The dividend would normally have been announced alongside the annual results for 2009 on 23 March and paid in April or May.

Richards will pay £264,000 in tax on the payout rather than the £330,000 he would have been charged if the dividend was paid in the usual manner.

Michael Alen-Buckley, chairman and co-founder of RAB, also saves £50,000 from the early payment on his dividend of £500,000 for 100 million shares.

Richards, who runs RAB's Special Situations fund, hit the headlines in the financial crisis after placing a £50 million bet on the recovery of Rock before it was nationalised.