Originally posted by RickG
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I think that Lord Hodge must have had in mind, when considering Rangers, that there was a difference between the tax analysis (broadly the employee becoming taxable when entitlement arose) and the reality of the cash flows, which was money from employer to trust. He must have thought that because the tax code creates the tax point, then the redirection elsewhere was not relevant.
The fact that the tax analysis ignores the actual cash flows is not unique. We do however have to consider the cash flow.
Whether the employee agreed to (his/her) money going to the trust explicitly or implicitly, the fact is that the trust should have had the money. (Sadly not always the case). There does not have to be an advantage to the employee in the money going to the trust.
The trust then made the loan. The source of the funds for the loan is probably of no relevance in determining whether the loan agreement is enforceable or not. That will be determined by the legal terms of the agreement.
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