Employee Benefit Trusts – Final Demand – Since 2014 we have been advising that members of Employee Benefit Trust Schemes to do something with their outstanding loans or assets held by their Employee Benefit Trusts.
Our blogs have constantly highlighted the need to take action.
Sadly, very few have, instead many have adopted the ostrich approach, which as you can imagine leaves them in a vulnerable position!
They were often introduced to such schemes by their accountants, the tax advice being provided by a Tax Planning House (which has since gone into liquidation).
This often only leaves them with their accountant to refer to, with mixed results.
On 10th August 2016 HMRC issued a White Paper entitled Disguised Remuneration which sets out clearly the HMRC position.
If you have an EBT that still holds either assets or loans, these must now be cleared by April 2019. The loans can only now be settled using cash and PAYE and NIC must be seen to be paid.
That means that there is still a window of opportunity for people (depending on their financial circumstances) to exit their EBT’s reasonably tax efficiently.
It is a very narrow window of opportunity.
What I find surprising is that although we are often talking about very large sums of money, they are reluctant often to pay meaningful fees.
It is often quite difficult to find a solution, but we have managed to degrade and reduce the tax liabilities for many clients and in many cases, close their EBT’s down completely.
There is no magic wand.
The planning is often quite involved but often solutions can be found.
If you hold an EBT – your time is running out!