Norla EBT Loan Scheme

[malvolio]

Like anyone I've looked into tax planning and taken various steps in the past.....

I think your wish is misplaced based on a misunderstanding.

As far as I am aware an EBT only delays your tax liability. They never entirely get rid.

There is always a loan there. If you close the loan with your trust then it is as though they paid a disbursement.. triggering a taxable event wherever you are resident. The loan is payable and there is an agreement. When you die the loan can be used to reduce your assets. Not sure what happens in this case with a taxable event.

I think some of them used to write off the loan somehow but this was pretty clearly never going to be sustainable.

If all else fails, the loan comes out of your estate when you die. Nice pressie for the wife and kids, eh...

I'm sure here's a wrinkle that stops that happening, but I somehow doubt it's in the public domain.

[LisaContractorUmbrella]

No need to apologise Lisa.

The umbrella company "industry" is built on FUD.

If you told people truly how easy and inexpensive it is to run your own LTD company you wouldn't have a business.

Good luck. you fill a demand. but don't get too righteous about it.

Don't worry Prozak I let my brother do the Ltd thing - that way we make sure that the contractors that come to us have every option available to them. That's Simon Dolan at SJD Accountancy in case you didn't know.

Righteous - that's funny

[prozak]

If all else fails, the loan comes out of your estate when you die. Nice pressie for the wife and kids, eh...

I'm sure here's a wrinkle that stops that happening, but I somehow doubt it's in the public domain.

If I had to guess....... I'd say the trustees are obligated to act in your best interest. In the event of your death this means the best interest of your estate... i.e wife and kids...

So i reckon there would be some advice given and the trust would recomend that the loan would be fully repaid into the trust - reducing the estate value and not triggering a taxable event. The beneficiaries then become wife & kids.... Not sure if that is possible.....

If a taxable event is triggered it is not the whole of the loan that is due... just the pAYE and NI on it...

Would be interesting question to one of the providers... or Trustees....

[LisaContractorUmbrella]

If I had to guess....... I'd say the trustees are obligated to act in your best interest. In the event of your death this means the best interest of your estate... i.e wife and kids...

So i reckon there would be some advice given and the trust would recomend that the loan would be fully repaid into the trust - reducing the estate value and not triggering a taxable event. The beneficiaries then become wife & kids.... Not sure if that is possible.....

If a taxable event is triggered it is not the whole of the loan that is due... just the pAYE and NI on it...

Would be interesting question to one of the providers... or Trustees....

Definitely a good idea to ask the providers or Trustees - we'd all love to see something in writing - we've certainly asked the spammers on here enough times but they don't seem keen for some reason

[Freelancer]

Cancel the party: - disguised remuneration legislation hits ebt’s and efurbs hard!

http://www.stratax.co.uk/pdfs/Cancel...Dec%202010.pdf

[malvolio]

http://www.stratax.co.uk/pdfs/Cancel...Dec%202010.pdf

Hate to say I told you so...

[prozak]

http://www.stratax.co.uk/pdfs/Cancel...Dec%202010.pdf

Nothing new in that article as far as I can tell...

[ChimpMaster]

Nothing new in that article as far as I can tell...

Well this made me laugh :

..They (EBTs) were also popular with Footballers, Entertainers, Computer Contractors and other High Earners..."

[LisaContractorUmbrella]

"In the end, it is clear HMRC are going to group together many different types of EBTs and EFURBS (where loans and benefits have been paid pre-December 9th 2010). Many Employees will therefore face a lottery, depending on the exact nature of the way their particular trust was set up and operated. Those who have purchased Disclosed Schemes from tax product sellers will be in my view, most at risk!"

Only one man's opinion obviously but I do wonder why, after such a purposeful onslaught from HMR&C, we are seeing more and more ads for 'Schemes' guaranteed to increase your earnings. Although I have been accused on this forum of spreading fear, uncertainty and doubt, I genuinely feel sorry for people who enter the contracting world with no knowledge of the legislative pitfalls and then get suckered into something which could, potentially, have serious financial consequences. I believe that people should take responsibility for their own actions but I wonder how much cause a new contractor would have to doubt the recommendation of an agency or a colleague? What made any of you start researching all the rules and regs that surround this industry I wonder??

[malvolio]

"In the end, it is clear HMRC are going to group together many different types of EBTs and EFURBS (where loans and benefits have been paid pre-December 9th 2010). Many Employees will therefore face a lottery, depending on the exact nature of the way their particular trust was set up and operated. Those who have purchased Disclosed Schemes from tax product sellers will be in my view, most at risk!"

Only one man's opinion obviously but I do wonder why, after such a purposeful onslaught from HMR&C, we are seeing more and more ads for 'Schemes' guaranteed to increase your earnings. Although I have been accused on this forum of spreading fear, uncertainty and doubt, I genuinely feel sorry for people who enter the contracting world with no knowledge of the legislative pitfalls and then get suckered into something which could, potentially, have serious financial consequences. I believe that people should take responsibility for their own actions but I wonder how much cause a new contractor would have to doubt the recommendation of an agency or a colleague? What made any of you start researching all the rules and regs that surround this industry I wonder??

What rules and regs?The suppliers are only advertising what they are selling and to be fair they usually deliver what they way they will. What they don't tell you is the potentially serious taxation issues you would face, but taxation is a personal concern. So they give you a pot of money but it's not their problem if you don't declare it properly or try to understand what tax you owe on it. After all, it's not their liability and it's not them that goes to court.

As I said a while back, as long as there are greedy hypocrites out there, someone will still be successfully selling these schemes.