Loans from EBTs and other Trusts

[LisaContractorUmbrella]

This was published at the beginning of August (draft legislation) and I think it makes HMR&C's position fairly clear http://www.hmrc.gov.uk/drafts/dta-av...tech-note2.pdf

[craig1]

This was published at the beginning of August (draft legislation) and I think it makes HMR&C's position fairly clear http://www.hmrc.gov.uk/drafts/dta-av...tech-note2.pdf

Fairly robust but full of typical legislative double-talk that'll help keep accountants and lawyers in healthy fees for years to come. It does make for a fairly broad brush treatment for all of the off-shore avoidance schemes that are discussed on here; it also makes using one of them even riskier.

[LisaContractorUmbrella]

Fairly robust but full of typical legislative double-talk that'll help keep accountants and lawyers in healthy fees for years to come. It does make for a fairly broad brush treatment for all of the off-shore avoidance schemes that are discussed on here; it also makes using one of them even riskier.

Usually I would agree Craig; HMR&C are not usually that good at closing potential loopholes but this is pretty straightforward:

"The proposed legislation will apply where a DTA makes provision that income,
profits or gains of a UK resident are either not subject to UK tax, not to be subject
to UK tax at a rate exceeding the rate specified in the DTA or not to be treated as
income, profit or gains of a UK resident and chargeable to UK tax"

Either that or I've spent far too many years reading stuff like this

[craig1]

Usually I would agree Craig; HMR&C are not usually that good at closing potential loopholes but this is pretty straightforward:

"The proposed legislation will apply where a DTA makes provision that income,
profits or gains of a UK resident are either not subject to UK tax, not to be subject
to UK tax at a rate exceeding the rate specified in the DTA or not to be treated as
income, profit or gains of a UK resident and chargeable to UK tax"

Either that or I've spent far too many years reading stuff like this

I did a law degree for my sins and even my unprofessional eye on the proposed sections saw many imprecise areas that will help ensure that taxation lawyers have a revenue stream for the foreseeable future.

A "plain English" version might read as: If a UK resident earns income in the UK that would normally be subject to UK taxation but seeks to avoid that through the use of a DTA then they will be liable for UK taxation as if the DTA did not exist.

[geoff from contracta IOM]

Lisa you do know thats not law yet ?

[BlasterBates]

but it will be very soon, and it is abundantly clear.

It's the end for the offshore schemes.

[geoff from contracta IOM]

I should have also added that in the case of my scheme largely irrevelant

[craig1]

Lisa you do know thats not law yet ?

Might not be law but it's a published intention from HMRC that has passed through the options and detailed policy stages of consultation and is into the legislation drafting stage. The only way it won't become law is if something even more restrictive replaces it. I'd expect it to be announced in the pre-budget statement later this year quickly followed by a HMRC announcement much like last year's EBT announcement before being introduced into formal law through the 2012 Finance Bill.

[geoff from contracta IOM]

Might not be law but it's a published intention from HMRC that has passed through the options and detailed policy stages of consultation and is into the legislation drafting stage. The only way it won't become law is if something even more restrictive replaces it. I'd expect it to be announced in the pre-budget statement later this year quickly followed by a HMRC announcement much like last year's EBT announcement before being introduced into formal law through the 2012 Finance Bill.

I think there are very few of these DTA schemes still kicking around BN66 put paid to most of them

[craig1]

I should have also added that in the case of my scheme largely irrevelant

I'd be genuinely interested to understand why you believe that. Can you post a few notes please on why your scheme won't get caught by that fairly simple test: UK resident + UK earned income + using off-shore scheme to avoid UK taxation = Caught.