Murray Group (Rangers) tax case - decision today?

[Not Losing Any Sleep]

Accountancy Age is reporting that reaction amongst advisers is mixed.

They quote a lawyer from Pinsent Masons saying "we're doomed" and a salesman from Rebus as saying that all EBT/EFURB schemes are bust and will be terminated with APN and Follower Notices.

They quote Jolyon Maugham based on his blog articles.

Stripped of hyperbole I think the Pinsent Masons' reasoning is debatable, Rebus' missing and Maugham's perhaps too "form over substance".

I was alarmed that Linkedin was apparently quoting an umbrella company operator as saying all contractor EBT schemes were doomed but actually it was linking to the Pinsent opinion piece.

It was curious that the 6 page spread in the Sunday Times on footballers being pursued for £100m created more column inches than the Murray case. Or was it?

A possible reason why the footballers and their film schemes was on the front page is that the likes of Ferdinand were a main part of the story.

HMRC might jump and down more if the Rangers case doesn't get, or doesn't request, leave to appeal.

[Iliketax]

Accountancy Age is reporting that reaction amongst advisers is mixed.

There's one I received today (which I can't share) that is headed " HMRC SUFFERS MAJOR DEFEAT IN RANGERS CASE "

[DotasScandal]

There's one I received today (which I can't share) that is headed " HMRC SUFFERS MAJOR DEFEAT IN RANGERS CASE "

Do tell?

[WalterWhite]

There's one I received today (which I can't share) that is headed " HMRC SUFFERS MAJOR DEFEAT IN RANGERS CASE "

BW?

[webberg]

BW?

If it's the one I've seen, I'd agree.

Nice piece of initials alliteration as well?

[Iliketax]

BW?

Yes

[WalterWhite]

If it's the one I've seen, I'd agree.

Nice piece of initials alliteration as well?

This is where i took the following from:

- contributions are tax deductible for the company
- loans to the employee are not taxable as income
- loans to the employee are deductible against IHT
- this is not deemed tax avoidance

your thoughts Graham?

[webberg]

This is where i took the following from:

- contributions are tax deductible for the company
- loans to the employee are not taxable as income
- loans to the employee are deductible against IHT
- this is not deemed tax avoidance

your thoughts Graham?

CUK has asked me for an article. rather than steal thunder if you wait a few days you'll see my thoughts.

[Not Losing Any Sleep]

CUK has asked me for an article. rather than steal thunder if you wait a few days you'll see my thoughts.

I'm looking forward to the Webberg article. One of the interesting issues is if the judgement contradicts in any way the 2011 leglisaltion.

[Iliketax]

I am not Graham but:

- contributions are tax deductible for the company

The judgement does not need say what the position is with regard to the corporate tax deduction. The case is not about that so the Court of Session does not address the point. From my perspective, if the amounts paid to the EBT are shown as an expense in the employer's accounts and taxed as earnings of the employee on the way in to the EBT (on the basis decided by the Court of Session) then they will be deductible. If they are not taxed on the way in then there is no deduction until (normally) the employee pays income tax.

- loans to the employee are not taxable as income

Again, on the basis of the decided in appeal and the legislation in place when the loans were made, that is correct. If the money was not taxed on the way into the EBT (e.g. because of different facts), then the judgement does not deal with that.

But since FA2011 I think that is wrong. There are transitional rules in para 59 Sch 2 FA 2011 that provide relief where the earnings arise on the way in to the EBT pre-2011 and the loan is made after 6 April 2011. Post 2011, I think that s554Z6 won't give relief from double tax on the loans unless you squint really hard.

- loans to the employee are deductible against IHT

The case is not about IHT and it's not mentioned in the judgement, other than to say this was one of the perceived advantages. In my view it's likely it would be if it really did reduce the value of the estate (i.e. if the estate really had to pay it back). But that would be a question of what the terms of the loan really were and that would be for another FTT to decide.

I would be interested in whether HMRC will take the point that the redirection of the money to the EBT by the employee was a chargeable lifetime transfer. The risk of HMRC taking this view may well be a material point that would encourage some people to settle.

- this is not deemed tax avoidance

You are having a laugh.

It's clear from the first witnesses at the FTT (e.g. Mr Yellow) and beyond that everyone thought that it was all about tax avoidance. Have a look at the second sentence in the Court of Session judgement.

One of the interesting issues is if the judgement contradicts in any way the 2011 leglisaltion

Not in the slightest.