The British property tycoon Jamie Ritblat and the Big Four accounting firm EY have reached a settlement with the UK tax authority HM Revenue & Customs (HMRC), which had claimed several million pounds.

HMRC pursued Ritblat, a donor of the Conservative Party, and his real estate investment firm Delancey for income and employment-related taxes on £141 million in profits that were distributed from a trust fund to 24 employees, including Ritblat.

The British tax authority also filed a lawsuit against EY over alleged false statements during the negotiations for a settlement, in which HMRC accepted only 400 pounds in 2015 and was thus prevented from claiming further taxes from the beneficiaries of the trust fund or from Delancey.

Ritblat and Delancey urged the High Court to hold HMRC to the 2015 deal, which would essentially leave the £141 million untaxed, aside from the settlement payment of £400. HMRC tried to cancel the agreement and hold EY accountable for its role in advising the settlement.

The agreement between one of the UK’s most well-known real estate investors – whose portfolio includes several of London’s largest redevelopment projects, including the transformation of Earl’s Court and the former Olympic Village – EY and HMRC ends one of the country’s most prominent and complex tax disputes.

The legal agreement was confirmed by all parties on Friday. The terms of the agreement were not disclosed.

HMRC stated: "This is a good outcome for the British taxpayer. We have secured a substantial settlement for the public purse, reflecting the result we would reasonably have expected from a successful court ruling, without the time and costs of further litigation.

The dispute over Ritblat revolved around an employee share trust fund that was established in 2007, when he raised 1.5 billion euros for Delancey's flagship fund DV4 Limited.

The DV4 Trust is an employee participation trust fund and held the employee earnings from Delancey, also known as Carried Interest, from the DV4 Limited investment fund.

In the tax years 2015-16 to 2018-19, the trust fund paid a total of £141 million to Delancey employees, of which £63 million personally went to Ritblat, according to HMRC.

The protracted dispute led Ritblat to sue HMRC in the High Court. The tax authority brought a case before the High Court against Delancey. There were proceedings before the Tax Tribunal related to Ritblat's personal tax returns. Then HMRC sued EY.

The lawsuit against EY was considered highly unusual by tax specialists, as the British government rarely targets large tax advisors in addition to their wealthy clients.

Delancey stated: "We are disappointed that it was necessary to take legal action against HMRC to achieve this. However, we are pleased that ultimately all parties were able to find a compromise to resolve the matter.

EY said: "We can confirm that EY has reached a settlement agreement with HMRC regarding this matter. The terms of the settlement are confidential.

The company had previously stated that it "strongly rejects any allegations of misconduct" and will "vigorously defend" the lawsuit.