Loans from EBTs and other Trusts

[BlasterBates]

EBT's have not worked since December 9th 2010, before that they worked perfectly well if they were correctly constructed and this has been proven, can we move on please EBT's no longer work they did at the time and there is no point discussing them now .

I have yet to see an admission from any of the "doom sayers" about EBT's that they were absolutely and completely wrong when they claimed that they didn't work.

If they weren't right then why would people trust they're judgement now ?
It does demonstrate a fairly weak grasp of the subject matter and a lack of credibility to be so fundamentally wrong when all the evidence says otherwise.

The BN66 trusts worked perfectly well for 7 years.

[DonkeyRhubarb]

All schemes carry some degree of uncertainty (risk). The compensation is the higher rate of return.

Most will be challenged by HMRC. At the very least people who use them should expect attention from HMRC.

Some will end up in the Tax Courts; others will be closed by legislation (hopefully not of the retro variety).

No-one here is in a position to say whether a particular scheme works or not. Only a court can decide this.

[porrker]

The BN66 trusts worked perfectly well for 7 years.

EBT's worked very well up until Dcember 2010 when specific legislation was drafted and implemented in April 2011 to restrict there use. Use them after December 2010 and your are potentially liable for PAYE and NI.

[LisaContractorUmbrella]

You start by not blindly swallowing what they tell you and examine the facts ?

I don't think most people accept it blindly but what can you actually DO??? If you fight a decision and you win - what do you get? Your legal costs reimbursed? Compensation for anguish and anxiety?

[geoff from contracta IOM]

I don't think most people accept it blindly but what can you actually DO??? If you fight a decision and you win - what do you get? Your legal costs reimbursed? Compensation for anguish and anxiety?

The point I am more trying to make is don't be afraid to challenge them and yes that may mean going to a tribunal if you believe you are right. But it is more a wider understanding of tax laws when in business.
As an example HMRC would have you believe that it is not legal to have an offshore company or an offshore bank account if you are UK resident, this is completely untrue but if you asked 100 people probably no more than 5 would know the correct answer. This is their PR machine at work.

[BlasterBates]

As an example HMRC would have you believe that it is not legal to have an offshore company or an offshore bank account if you are UK resident, this is completely untrue but if you asked 100 people probably no more than 5 would know the correct answer. This is their PR machine at work.

Where did you get that impression from?

Of course you can have an offshore company or a bank account.

You just need to declare it, and if you have any foreign company which does business in the UK then it needs to set up a branch in the UK.

It's outlined in the relevant DTA on their website.

[BlasterBates]

Take heed of the following warning in the Daily Telegraph:

Did expat contracts use EBT loophole to avoid high earner taxes? - Telegraph

EBTs are an easy target because they were mis-sold in their thousands by financial advisors," he said. "The rules are now structured in HMRC's favour, and of course they’ll go after the low-hanging fruit

...and some more advice. Of course one could argue the points in the Rangers football club case don't apply. The point is they'll be enquiring into other schemes and their hand is been strengthened by the new rules as pointed out here:

http://www.milestonetax.co.uk/wp-con...March-2012.pdf

EBTs and EFRBS are very much
under the microscope and if you have established one or are
a beneficiary you can expect an enquiry sometime soon.

I would advise anyone to read that, and perhaps take advice from a reputable Uk accountant or tax lawyer (eg above) for balanced and well informed view of what the risks are. Well worth paying a few hundred quid for advice which might save you 100-200 grand.

[geoff from contracta IOM]

Where did you get that impression from?

Of course you can have an offshore company or a bank account.

You just need to declare it, and if you have any foreign company which does business in the UK then it needs to set up a branch in the UK.

It's outlined in the relevant DTA on their website.

This is what I mean,

There is no obligation whatsoever to declare the existence of the account but any income generated in the form of interest should be declared on your SA return.

No, a foreign company does not need to set up a branch in the UK to do business there.

[BlasterBates]

From the DTA on tax in the UK and Isle of Man for businesses:

(2) The industrial or commercial profits of a Manx enterprise shall not be subject to United Kingdom tax unless the enterprise is engaged in trade or business in the United Kingdom through a permanent establishment situated therein. If it is so engaged, tax may be imposed on those profits by the United Kingdom, but only on so much of them as is attributable to that permanent establishment.

Which means if you have someone working in the UK that would be considered a pemanent establishment.

That's what I mean.

[geoff from contracta IOM]

From the DTA on tax in the UK and Isle of Man for businesses:



Which means if you have someone working in the UK that would be considered a pemanent establishment.

That's what I mean.

Ummmmmmmmm no it doesn't , and I wasn't talking about IOM companies or DTA's or EBT's for that matter