Reply to: Whats the crack with EBT'S

[ANSOF]

Thanks for all the good adivce everybody.

[BlasterBates]

If the money really belongs to you then its taxable, if HMRC can't prove that then it isn't....but hang on if they can't do that can you?

Some successful schemes actually ask you to pay back the loan, after all they sucessfully demonstrated to the HMRC the money belonged to them and not you, why should you keep it?

[pmeswani]

Here's a joke for ya:

When is a loan not a loan?

I'll leave the rest to you...

When you don't have to pay it back until HMRC investigates?

[ratewhore]

Here's a joke for ya:

When is a loan not a loan?

I'll leave the rest to you...

[BlasterBates]

The trouble is by the time you know it doesn't work you already owe the taxman several hundred grand, and how much do you save?....hmm not worth it really.

[PhilAtBFCA]

Ebt

ANSOF

I think in fairness what has been pointed out to you is there is alot of "fall out" from people who have been in EBT and other Offshore or Onshore Schemes.

Most of the people in these schemes will regularly tell friends how they are cleverly avoiding tax, but you may find them not so keen to tell you about the "fall out" witnessed on this forum for instance.

A couple of things for you to consider:-

1. You may never be sure HMRC is not going to come knocking on your door disputing your arrangements until all the time thresholds have passed. Its a long time. If your friend feels he is "getting away with something" then he probably is, and he will probably get caught out at some point. ( Read the fourms )
2. Behind all the schemes is a scheme promoter who will make money whether it works or not for you.
3. Scheme Promoters will get Counsels Opinion on if the scheme will work or not. They pay for that service, and guess what the Opinion says it will most likely work, but nothing can be 100%. Another person could get and pay for an opinion that is different. They are just legal arguments.
3. When a scheme is advised to HMRC, they will change the rules, the scheme will close, the fights will start. Sometimes this takes years to happen ( BN66 ?), sometimes its quicker, but on the whole it happens eventualy.
4. There are alternatives that will promise a bit less, but deliver far less risk.

I hope that helps.

Phil

[ANSOF]

Whats the crack with EBT’s?

Ok, without boring you too much I will try to explain.

If your colleague is recommending you join his/her ETB scheme, DON’T!!!


An ETB should be set up for the purposes of the individual Limited Company, costs will be in the region of £15k. Most reputable EBT providers will only set up a trust for companies with over £150k profit before tax, its not worth setting one up for anything less.

The idea is to transfer most/all the profits into an EFRBS, (Employment Financed Retirement Benefit Scheme) where you can withdraw the funds when and if you need it, this will not attract any personal tax.

In this current tax year (2009/10) EFRBS are legal in the UK, how long will this be the case, your guess is as good as mine.

Thanks for information. I dont earn that for a kick off anyway!

[pmeswani]

No, his friend will be along in a moment with post count = 1, to satisfy our curiosity and let know how we can take advantage of this.

Darn true.

[ANSOF]

Just wanted some advice not a grilling. He informed me he put money in and took it back out as a loan to minimse tax. wanted to see if this was above board that's all?

[BrilloPad]

On the surface they are quite similar to loan schemes.

IMO stick well clear.

See the bn66 thread for what can happen.

[Tax Lord]

Whats the crack with EBT’s?

Ok, without boring you too much I will try to explain.

If your colleague is recommending you join his/her ETB scheme, DON’T!!!


An ETB should be set up for the purposes of the individual Limited Company, costs will be in the region of £15k. Most reputable EBT providers will only set up a trust for companies with over £150k profit before tax, its not worth setting one up for anything less.

The idea is to transfer most/all the profits into an EFRBS, (Employment Financed Retirement Benefit Scheme) where you can withdraw the funds when and if you need it, this will not attract any personal tax.

In this current tax year (2009/10) EFRBS are legal in the UK, how long will this be the case, your guess is as good as mine.

[expat]

Has your friend been investigated by the Inland Revenue yet? If not, tell him / her to expect one soon.

No, his friend will be along in a moment with post count = 1, to satisfy our curiosity and let know how we can take advantage of this.

[cojak]

hI All,

One of my friends has been banging on about this EBT (employee benefit trust) hes involved with and claims he avoids alot of tax.

Anyone with any experience on this?

Is he on the Board?

That's the only way he'll make a profit on it (unless HMRC ban dividends, of course...)

[pmeswani]

hI All,

One of my friends has been banging on about this EBT (employee benefit trust) hes involved with and claims he avoids alot of tax.

Anyone with any experience on this?

Has your friend been investigated by the Inland Revenue yet? If not, tell him / her to expect one soon.

[Fred Bloggs]

Tried the search facility then?