The Excello law summer conference took place on 1 July, the UK’s hottest day for 13 years. Skimming the conference programme on the way to Stapleford Park, I realised that I was down to give a 20 minute ‘tax insight’ qualifying for CPD points. As I had thought I was going to talk about myself for 20 minutes (an easy task for any lawyer) this meant I had around an hour and a half to get something technical together.
HMRC withdrew its Employee Benefit Trust (‘EBT) Settlement Opportunity (the ‘EBTSO’) earlier this year. Until 31 March 2015, HMRC were offering employers of beneficiaries under EBTs a way of settling the uncertainty relating to the taxation of the EBT.
Such uncertainty might relate to HMRC’s stated opinion that the creation of sub-trusts, or the making of loans, to beneficiaries always constituted the making of a taxable distribution to the beneficiary.
Since the introduction of the disguised remuneration rules, now found in Part 7A of the Income Tax (Earnings & Pensions) Act 2003 (‘ITEPA’), many companies are faced with a problem about what to do with their Employee Benefit Trust (‘EBT’).