Employee Benefits Trust – latest

Employee Benefits Trust – latest ruling – HMRC seeking to use the latest ruling on Rangers Football Club Employee Benefit Trust to ride roughshod over all members of EBT and EFRBS that have not made settlement with them.

Regardless of the rights and wrongs of the ruling, advisers do agree the consequences are significant for those operating EBTs.

“Unless it is overturned in the Supreme Court, it essentially blows out all EBTs and EFRBS,” states one very experienced EBT practioner ,”In simple terms, the court now says that the technical arguments approved by the commissioners and the tribunal in those cases should have been dismissed by an overriding ‘substance over form’ argument.

The majority of firms that promoted EBT and EFRB structures, did so on the back of  very detailed and well-reasoned counsel’s opinions.

It’s likely that HMRC will use the ruling to put more pressure on settle EBT users to make settlement, with accelerated payment notices and follower notices likely to be called upon.

“The basis of the decision was not the result of a small technicality: rather, the judges’ interpretation that ‘common sense’ should prevail and money received as a result of employee services should be taxable,” is one persons opinion.

The Rangers Football Club Employee Benefit Trust was always liable to fail as the club issued side papers to all the people participating, informing them that ” they would never have to pay back the monies owed”.

Did this affect the ruling?

We find it odd that this ruling should fly in the face of the other court cases that clearly indicate that a loan is a loan and not remuneration.

As we have consistently stated we believe all EBT holders should take action and seek advice to minimise their tax liabilities from an experienced EBT practitioner.

 

 

About Ray L Best

Ray Best has had over 30 years experience of advising on complex financial matters. A published author of a number of books including “Partnership and Shareholder Protection”, Inheritance Tax Simplified”. We provide an initial meeting at no cost and only engage with clients when we can add significant value.

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