ToAA

[StrengthInNumbers]

For ToAA to apply, Tax avoidance should be a motive. EBT has been proven legal before and Ranger's, Deutsche, UBS all have won. So if tax benefit to contractor is because of EBT Loans and NOT by Transferring asset abroad, how can tax avoidance be a motive and thus how should ToAA apply?

HMRC can continue to and say settle but are not providing any substantial arguments.

[Saleos]

I guess the world loves an optimist! But have you actually read the decision in Fisher?

http://www.taxchambers.com/wp-conten...isher-ToAA.pdf

Pages 48 to 89 are as detailed an analysis of the motive defence against the application of the ToAA provision as there has been for some time.

Points to note - HMRC don't accept that the EBT cases are analogous - contrast for example the circumstances (and ability to repay) of an international footballer, banker or telecom's tycoon receiving a bonus (on top of a substantial six figure salary) from a typical contractor. None of the EBT cases considered the ToAA points or the availability of the motive defence. The FTT simply decided that loans were not earnings that should have been subject to PAYE.

It will be for the taxpayer to prove that there was no tax avoidance motive; not for HMRC to prove their was. Expect to be asked why contractors took loans rather than salaries for example.

HMRC succeeded in defeating Boyle and Fisher's attempt to argue the motive defence was available.

That is not to say that I think the argument are forlorn. Far from it. But there are far stronger arguments IMO and ultimately the reality is there are only two ways this will be resolved: settlement or litigation. It is therefore important that everyone assesses their appetite for settlement objectively: everyone's circumstances are different. For some it will be attractive, for others not. And everyone has to ask themselves if they don't settle then what next? Closure notices? APN's?

In the interests of openness these views are mine and mine alone. I'm a CTA with 20+ years experience now dealing with disputes with HMRC for over 3,000 contractors in EBT loan schemes and will ultimately be leading two of those arrangements, and over 2,000 contractors, into litigation to resolve the Mexican stand-off. :ladybugs:

No substitute for DYOR, professional advice and a dose of reality every now and again.

For ToAA to apply, Tax avoidance should be a motive. EBT has been proven legal before and Ranger's, Deutsche, UBS all have won. So if tax benefit to contractor is because of EBT Loans and NOT by Transferring asset abroad, how can tax avoidance be a motive and thus how should ToAA apply?

HMRC can continue to and say settle but are not providing any substantial arguments.

[StrengthInNumbers]

Thanks Saloes. I tried reading Fisher but it is too complex.

[StrengthInNumbers]

I am no arguing as Saleos would have better knowledge but Fisher had a benefit by transferring of asset abroad and Boyle all the arguments were even not raised.

An employee of company based in IOM getting loans through EBT, had no benefit by transferring assets abroad. Based on same EBT structure in UK, his tax situation would have been exactly the same. Thus I feel, ToAA should not apply.