MORGAN STANLEY EUROPEAN TAX EQUALISATION POLICY

EXHIBIT 10.5

MORGAN STANLEY

EUROPEAN TAX EQUALISATION POLICY

MORGAN STANLEY

EUROPEAN TAX EQUALISATION POLICY

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If the employee would like to maintain his current personal tax adviser for preparation of his home and/or host country tax
return(s), he/she should inform [email address redacted] prior to the start of his assignment. The employee will have to provide PwC with copies of relevant tax returns prepared by an alternative tax adviser in order for PwC to prepare annual tax equalisation calculations.

Authorised employees are expected to co-operate fully with Human Resources and PwC in the preparation of actual tax returns and tax equalisation calculations. This includes providing all necessary information to Human Resources and PwC on a timely basis, prompt filing of completed home and host country tax returns, and prompt payment of any taxes due.

In cases in which late filing penalties or interest result from an employee’s delinquency or negligence, the employee will be liable for the actual penalties and interest assessed by the relevant tax authorities against his actual tax liability.

The Firm will not be responsible for any incremental accounting fees, late filing or payment penalties or interest that result from an employee’s lateness in providing information to PwC or not filing on a timely basis.

All questions regarding policy and procedure should be directed to [name redacted] or [name redacted] in London Human Resources.

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Morgan Stanley European Tax Equalisation Policy

Expatriates will be required to arrange and attend a “departure” meeting with PwC at the offices of Morgan Stanley prior to departure from the home location. At this meeting, all expatriates will be required to complete appropriate income tax and social security forms, any tax refund claim forms, any social security filings and other relevant documents, provide any necessary information relevant to the tax equalisation calculation and will receive limited home country tax planning advice related to their overseas assignment.

Upon return from the assignment, expatriates should also arrange and attend an “arrival” meeting with PwC to complete entrance forms, to receive advice on their taxation responsibilities, and to ensure that they are being taxed correctly on returning to the home country.

The relocation allowance will not be paid until HR receives confirmation from PwC that the employee has met with them for the “departure” meeting and all necessary filings have been satisfactorily completed.

Expatriates will be subject to actual or hypothetical home country social security contributions for the duration of the overseas assignment. The expatriate’s contribution will be based on actual rates for home country social security contributions in force each year. Where the home country has reciprocal arrangements with the assignment country, the Firm will maintain the employee in the home country social security to the extent possible. In locations where no reciprocal arrangements exist, the Firm will be responsible for meeting all foreign social security costs during the assignment period.

Please refer to Section IV: Appendix, for further UK specific information around Social Security issues whilst on assignment from the UK.

Authorised employees must annually complete and submit a home country tax organiser to the PwC office responsible for their home country tax filings. PwC will then prepare all of the necessary home country tax returns. Please note that to the extent host country taxes paid by the Firm can be recovered by filing a home country tax return and claiming foreign tax credits, such tax recoveries/refunds should be refunded to the Firm.

Authorised employees must annually complete and submit a host country tax organiser to the PwC office responsible for their host country tax filings. Although actual host country taxes are paid directly by the Firm, all employees are responsible and are required to file host country tax returns. As the Firm meets the employee’s actual host country taxes, any refund received from the host country tax authorities should be refunded to the Firm.

As the late filing of income tax returns may result in the assessment of penalties and interest, authorised employees are required to return the tax organisers within four weeks of receipt. The Firm reserves the right to withhold payment of expatriate benefits if the expatriate is delinquent in supplying the necessary information.

It is the authorised employee’s responsibility to ensure that tax returns are filed on a timely basis. In cases in which late filing of the return or late payment of the tax raised by the assessment is due solely to the authorised employee’s

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Morgan Stanley European Tax Equalisation Policy

delinquency or negligence, the employee will be liable for the actual penalties and interest assessed by the tax authorities. No credit for these interest and penalties will be given in the tax equalisation calculation.

The Firm will not meet the cost of preparing additional country tax returns (that is, other than home and host country), unless the expatriate is a US Citizen or Greencard holder (whereby Section III C 10 will apply), or authorisation for additional returns has been approved prior to the start of the assignment. Where the expatriate believes that any additional tax returns may be required as a result of business travel, this should be raised with PwC.

Once an expatriate’s final hypothetical tax liability for a particular tax year is calculated, all tax payments made by the expatriate are compared to the final hypothetical liability in order to determine if the Firm has a balance due to the expatriate or vice versa. Tax payments made by the expatriate include but are not limited to:

Any payment due to the employee will be made with the first available payroll after agreement of the final computation. Typically, this will be approximately six to eight weeks. If the expatriate owes the Firm further hypothetical tax, the final liability should be remitted within eight weeks of agreement of the final computation. If payment is not received within eight weeks, the Firm may add interest to any balance due at the official rate as charged by the home country tax authorities for late payment. In addition, the Firm reserves the right to offset outstanding liabilities to the Firm (including interest) against any other compensation amounts due to the employee, including but not limited to, bonuses and other above base compensation, termination or severance payments, etc. provided that, to the extent applicable, the Firm may not offset any outstanding liabilities to the Firm against nonqualified deferred compensation (as defined in Section 409A of the US Internal Revenue Code (“Section 409A”)) that is due to an employee, except to the extent not prohibited by Section 409A and would not cause the employee to recognize income for United States federal income tax purposes prior to the time of payment or settlement of such compensation or to incur additional tax or interest under Section 409A.

For further information regarding the tax equalisation calculation, please refer to Section III.

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Morgan Stanley European Tax Equalisation Policy

In addition to meeting the cost for preparation of home and host country tax returns in respect of all applicable years during the assignment, the Firm also provides the expatriate with advisory time to meet with PwC. The Firm will absorb the cost of this advisory time up to the following maximum time limits in each year of assignment:

Note that any unused allocation cannot be carried forward from year to year nor can future years’ entitlement be used currently. In addition, note that the maximum time limits are for consultations in both the home and host countries.

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Morgan Stanley European Tax Equalisation Policy

An expatriate receives as part of his compensation package a base salary, a Cost Of Living Allowance (COLA), when appropriate, an assumed home country housing deduction, when appropriate, and hypothetical tax and social security withholding.

It should be noted that hypothetical withholding, as with actual withholding or provisional tax payments required in certain jurisdictions, is an estimate of the expatriate’s final hypothetical tax. This estimate will be adjusted up or down on the tax equalisation resulting in a refund due to the expatriate or a liability due the Firm, just as actual withholdings or provisional tax payments are credited on the actual filing of a tax return resulting in an amount due to, or from, the tax authority.

The hypothetical withholding will not take into account the effect of any tax planning mechanisms, with the exception of monthly pension contributions made via the home country payroll. Appropriate tax relief for these investments will be reflected in the final hypothetical tax liability.

Adjustments to hypothetical tax withholding will be allowed only for those expatriates who have substantiating evidence, and are subject to review by International Services.

The tax equalisation calculation is prepared by PwC. Expatriates are tax equalised up to and including the tax year of repatriation or termination. In some cases, tax equalisation may extend to subsequent tax years to the extent that those years are affected by items of income, deduction or credit relating to the expatriate assignment, with the exception of executive compensation (including but not limited to, stock units and stock options). The tax equalisation calculation is essentially a hypothetical or “dummy” home country return in which tax is calculated and assessed only on income and deductions an employee would have received had he/she remained in the home location.

Listed below are the types of income which are generally subject to hypothetical tax, as well as those types of income which are not subject to hypothetical tax. The Firm pays the actual home and host country taxes on both types of income:

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Morgan Stanley European Tax Equalisation Policy

The assumptions listed below are used in the preparation of the tax equalisation calculation:

For expatriates who terminate employment in a host location and do not return to the home country, the Firm will be responsible only for the host taxes that would have been due if the expatriate had returned to the home location upon termination. Expatriates should be aware that this can result in a significant differential in some jurisdictions.

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Morgan Stanley European Tax Equalisation Policy

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Morgan Stanley European Tax Equalisation Policy

Where an expatriate is assigned to a host country with which there is no totalisation agreement with the UK, the expatriate may not be able to remain subject to UK national insurance. As such, actual national insurance contributions may not be paid by the Firm during the assignment. In these circumstances, the Firm will pay the employer and employee social security contributions required in the host country.

An expatriate in this position should consider paying UK voluntary (Class 2 or Class 3) national insurance contributions for the period of his assignment in order to maintain his UK national insurance record and to make each tax year of the assignment a qualifying year for UK state pension purposes. PwC can provide further information in this regard at the exit interview.

Note that regardless of the expatriate’s actual social security position whilst on assignment, he/she will be subject to actual or hypothetical UK Class 1 national insurance contributions.

In very limited circumstances, the Firm and/or the expatriate will not be able to pay employee social security contributions in either the home or host countries, and as a result, the expatriate might not be covered by any social security scheme for the duration of his assignment. These cases will be dealt with on an ad hoc basis.

If a UK expatriate does not have a national insurance number, he/she must make arrangements to apply for one prior to his departure from the UK, if he/she is eligible to do so. Eligibility can be confirmed by PwC. If the Firm is unable to obtain continuing coverage under the UK social security system as a result of the expatriate’s failure to apply for a national insurance number, the expatriate will be responsible for any incremental employer and employee social security costs which arise in the assignment location.

Upon actually leaving the home country for the assignment location, if the assignment is likely to extend to at least one UK tax year, most expatriates will provisionally cease to have any further UK tax liability on their earned compensation. Although no actual UK tax will then be withheld on base and above base compensation, the Firm will withhold hypothetical tax. If, however, an actual UK liability exists during the assignment due to interest, dividends, rental income, etc arising in the UK, the law requires that a UK tax return be filed on a timely basis.

Even if the expatriate has no actual UK tax liability and no actual UK tax return is therefore required, the expatriate is still responsible for the payment of hypothetical taxes. The Firm provides PwC with all necessary Morgan Stanley compensation and benefits information for each tax year. Each expatriate must supply PwC with all other information pertinent to the calculation of the hypothetical tax. An organiser will be sent to the expatriate shortly after the end of the tax year and it is required to be returned within four weeks of receipt.

The hypothetical tax withholding on base salary is determined by a number of factors, including the level of base salary and the current tax year’s hypothetical PAYE tax code. Hypothetical tax on above-base compensation will also be withheld at the employee’s appropriate UK marginal tax rate.

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Morgan Stanley European Tax Equalisation Policy

Employees with dual contracts of employment prior to their foreign assignment will be tax equalised as if the dual contract continued to be in effect (subject to the provisos outlined in the below paragraph). The compensation related to the non-UK contract will be calculated for hypothetical tax purposes by using the percentage of business days the employee spent working for Morgan Stanley under the non-UK contract during the Firm’s year (on an annualised basis) immediately prior to the year of their foreign assignment.

In calculating the hypothetical offshore percentage, please note the following two provisos: (i) Any business days spent working in the pending assignment location city will not be included for the purposes of the hypothetical dual contract split. (ii) The prior year actual dual contract split will not be used for calculating the hypothetical split if that year is deemed to be unrepresentative of the employee’s typical travel pattern. In all cases, the proportion to be treated as paid under the non-UK contract will be determined by Human Resources.

Payments of base salary made under both the UK and the non-UK contracts will be included in the spendable income computation for Cost of Living Allowance purposes and in the calculation for the hypothetical tax deduction for that computation, but only the UK base salary will be included in the calculation of the hypothetical tax to be actually deducted in arriving at net income. In addition, please also note section E below with regard to the remittance basis for those employed under a dual contract.

Dual contracts will be used in tax equalisation only as long as dual contracts remain effective for UK income tax purposes and valid under UK tax law. There is no guarantee of obtaining a dual contract on repatriation and this will be reviewed based on facts, circumstances and applicable law for continuation.

Employees with a history of claiming relief on their UK tax returns for workdays spent outside of the UK will continue to be equalised to this position whilst on assignment, subject to the following:

With effect from 6 April 2008, non-UK domiciled individuals and those considered Resident/Not Ordinarily Resident in the UK are required to make a claim to be taxed on the remittance basis if total relevant offshore income and gains in any tax year exceeds £2,000, thereby forfeiting any claim to a personal allowance. Employees falling within these categories will be equalised to the remittance basis whilst on assignment, subject to the following:

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Morgan Stanley European Tax Equalisation Policy

Certain allowances and deductions given/claimed on the expatriate’s UK tax return immediately prior to his foreign assignment may be allowed on the hypothetical return. These allowances and deductions include, but are not limited to:

Where an employee was entitled to receive child benefit prior to the commencement of their overseas assignment, this will continue to be recognised within the tax equalisation calculation for the duration of the assignment period. The employee is responsible for notifying and providing evidence of the births of any children during the assignment period.

With regard to pension contributions, the maximum amounts to be included within the tax equalisation calculation will be limited to the average contributions made by an employee in the previous three tax years prior to the date of commencement of the overseas assignment.

Where pension contributions are subject to the Special Annual Allowance charge introduced on the 22 April 2009; this charge will not be covered by the tax equalisation policy.

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Morgan Stanley European Tax Equalisation Policy

An employee will be subject to this Special Annual Allowance charge if they:

a) £20,000 per annum; or

b) the employee’s ‘regular’ pension contributions prior to 21 April 2009 (i.e. contributions made at least quarterly); or

c) if appropriate, the limit imposed for infrequent pension contributions (see below).

The Special Annual Allowance charge is calculated as 20% of any contributions over and above the abovementioned thresholds.

If you have made ‘infrequent’ (less than quarterly) contributions of more than £20,000 into a money purchase scheme between 6 April 2006 and 5 April 2009, then your special annual allowance limit will be the three year average of your infrequent contributions - up to a higher maximum of £30,000. However, this limit may only be applied after deducting any regular contributions already made.

The Firm recognises that as a result of the expatriate assignment the individual may be prevented from participating in UK tax efficient income schemes such as an Individual Savings Account (ISA). To compensate the individual for this, the Firm will exempt from hypothetical tax the first £900 of an individual’s outside investment income (excluding capital gain income). This will be expressed in the form of a deduction against investment income, limited to the lower of the investment income or £900.

Deductions for the Cycle2Work and/or Computers@Home and/or Gym salary sacrifice schemes will continue during the expatriate assignment, up to the end of the relevant scheme’s life.

Expatriates who have elected to purchase Salary shares via the UK Share Ownership Plan will continue to have deductions taken from their salary throughout the annual deduction period unless they give notice for the Firm to stop making deductions.

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