Loans from EBTs and other Trusts

[Vallah]

I stand corrected, apparently, HMRC haven't won the rangers case...

BBC News - Former Rangers Football Club wins Big Tax Case appeal

Yes, very interesting that.

Full judgment here:

http://www.financeandtaxtribunals.go...51/TC02372.pdf

and it contains the following quotes:

"The extent of the employer’s obligation is to make a
payment into trust. The trust structure and loans bear to be of legal effect. Loans
were discretionary although in fact they were (almost) invariably granted. But that
was the extent of the employee’s benefit. Whether the arrangement is viewed
commercially or legalistically, the inexorable conclusion, in our view, is that the
payments into trust became a loan and no more. They were not paid over absolutely
and so do not become earnings or emoluments.”

Yet more weight of evidence in the use of EBTs, even in a case such as this which does not appear to be a very well run scheme.

[prozak]

Yes, very interesting that.

Full judgment here:

http://www.financeandtaxtribunals.go...51/TC02372.pdf

and it contains the following quotes:

"The extent of the employer’s obligation is to make a
payment into trust. The trust structure and loans bear to be of legal effect. Loans
were discretionary although in fact they were (almost) invariably granted. But that
was the extent of the employee’s benefit. Whether the arrangement is viewed
commercially or legalistically, the inexorable conclusion, in our view, is that the
payments into trust became a loan and no more. They were not paid over absolutely
and so do not become earnings or emoluments.”

Yet more weight of evidence in the use of EBTs, even in a case such as this which does not appear to be a very well run scheme.

But ONLY the use of EBT's up to 9th December 2010.

As far as I am aware (and I am admitedly not one to trawl for cases just for fun) There have been no similar judgements on the self-employed work-around that most providers are currently peddling nor the commercial loan scheme that others use.

How exciting. A whole new series of posts and disappearing providers making its way onto these boards soon!

[supernova]

Cop 8 on loan during 2010/11

Hi I received a cop8 letter recently regarding loan payments during 2010 /11 (actually there was only 1 payment around april 2010) and I missed to include this in the 2010/11 SAR. I didn't fully understood what the loan payments are and how they are treated for tax purposes then. I usually receive p11d and p60 and i just copy the figures and submit the return. Only after I received the letter i googled around and got to know what EBT/BIK is all about and came to this post. Obviously I didn't include the loan payment on my 2011/12 return as well. I came across few posts on this thread with people with similar letter (cop8) from HMRC. Any help / suggestions on what I should do would be very helpful.

[sal626]

Hi I received a cop8 letter recently regarding loan payments during 2010 /11 (actually there was only 1 payment around april 2010) and I missed to include this in the 2010/11 SAR. I didn't fully understood what the loan payments are and how they are treated for tax purposes then. I usually receive p11d and p60 and i just copy the figures and submit the return. Only after I received the letter i googled around and got to know what EBT/BIK is all about and came to this post. Obviously I didn't include the loan payment on my 2011/12 return as well. I came across few posts on this thread with people with similar letter (cop8) from HMRC. Any help / suggestions on what I should do would be very helpful.

Some cop8 letters say they are dealing with the enquiry centrally, ie they will progress with the scheme provider, in which case they will not require anything of you.

Some letters may ask you to provide some further information (recently these seem to be being sent out).

Which one have you got?

In any case, your first step should be to contact your scheme provider and seek thier advice.

Which scheme were you with anyway?

There are other people on this forum who were with various schemes at some point in time, it might be useful for you to get in touch with them as well.

Ask Admin to give you PM rights.....pm me as well if you want further info...

[seanb85]

New Poster (Be gentle)

Hi guys,

New to the forum but it would be interesting to know how many people on this forum are currently using an off-shore loan arrangment? (minimum salary and then the rest bulked up by a loan agreement)...

[cojak]

I would imagine that very few would be prepared to admit that they do on this forum.

[seanb85]

I would imagine that very few would be prepared to admit that they do on this forum.

Why?? It's a forum!

[seanb85]

Also Cojak, can you switch on PM privileges for me please? Thanks

[cojak]

Because they wouldn't want the unwelcome attention of some readers of this forum.

Also I've promised to move posts to General from anyone who asks about an use these schemes and then comes back to complain that said scheme has been closed down and they are then left with a big tax bill.

You get PM privileges after 10 posts.

[DonkeyRhubarb]

Why?? It's a forum!

With possible HMRC lurkers.

HMRC used posts from another CUK thread as evidence in court.