PROFITS at Walter Scott & Partners, the Edinburgh-based fund manager that is owned by Bank of New York Mellon, climbed by 86 per cent in the year to December 2015 thanks in large part to its expenses bill no longer making provision for potential tax liabilities on overseas funds.

The firm, which manages equity portfolios for institutional investors, reported a three per cent rise in turnover from £202 million to £208m, with post-tax profits rising from £61.8m to £114.8m. Over the same period the company’s administrative expenses fell from £124.4m to £66m.

Executive chairman Rodger Nisbet said: “Administrative expenses decreased by £58.4m – 47 per cent – during the year.

“Prior year administrative expenses included £75.8m in respect of potential overseas fund tax liabilities.

“This does not represent acceptance of any liability but ensures no further interest can accrue whilst the matter is being considered.”

He added that the company is still in discussions with the UK tax authorities regarding whether it will have to pay overseas tax on six limited liability funds, but that “the expected outcome and timing are not known”. The discussions have been ongoing for several years.

The firm’s accounts reveal that salaries were up across the board, with its six directors receiving an average pay package of £3.5m, up from £2.3m the previous year.

The total pay pot for the firm’s 112 staff was £40m, up from £25m for 99 staff a year earlier.

The dividend the company pays to its parent BNY Mellon increased by five per cent, from £95m to £100m, while charitable donations were up from just under £300,000 to just over £450,000.

Mr Nisbet said these donations went to “various groups facing special challenges, those providing education and smaller, local charities”.