HMRC Spotlight on Trusts

August 26th 2009

HMRC have recently updated their Spotlights on avoidance activities.  In the recent release, Spotlight 5: “Using trusts and similar entities to reward employees - PAYE (Pay As You Earn) and National Insurance contributions (NICs), Corporation Tax and Inheritance Tax”, HMRC outline their views on the uses of Trusts in tax planning arrangements.

The spotlight can be accessed at

http://www.hmrc.gov.uk/avoidance/spotlights.htm

Spotlights were introduced in the 2009 Budget to highlight a selection of activities which, in HMRC’s view, are not likely to have the legal effect desired by those thinking of using them.

Needless to say, neither we, nor leading Tax Counsel share the views outlined by HMRC in Spotlight 5, and continue to believe our Employee Benefit Trust arrangements are technically robust and would stand up to scrutiny. 

For a more detailed discussion on this and on other tax planning advice please contact Paul Merrell on 0115 983 5580 or email pmerrell@edftax.co.uk