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Employee trusts ― implications of disguised remuneration and where are we now?

Produced by Tolley in association with
Employment Tax
Guidance

Employee trusts ― implications of disguised remuneration and where are we now?

Produced by Tolley in association with
Employment Tax
Guidance
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Employee benefit trusts (EBTs) are commonly used to support employees’ share schemes and to provide other benefits to employees. For example, EBTs were used to provide additional benefits where the previous reduction of the pension lifetime allowance resulted in employees having significantly less tax efficient pension provision than was intended. Many employers established employer financed retirement benefit schemes although the trusts were in fact an EBT that permitted the provision of retirement benefits. EBTs were also used to provide what was believed to be ‘tax efficient’ bonuses ― contributions to an EBT would be held for an employee’s (or a class of employees’) benefit. The EBT would either invest for the benefit of the employees, or more widely, the EBT would provide a loan to the employee. The employee would have the benefit of the loan and not suffer the tax liability of a payment made outright to the employee.

The use of EBTs has been significantly affected by the introduction of the disguised

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Anton Lane
Anton Lane

Managing Partner, Edge Tax LLP , Corporate Tax, OMB, Employment Tax, International Tax, Personal Tax, IHT Trusts and Estates


I started my career helping to sort out tax problems for high net worth individuals, corporations and high profile clients under investigation for suspected serious fraud at Ernst & Young. I specialised in anti avoidance legislation targeting offshore structures and held senior positions with large offshore fiduciary service providers. I established the Edge brand over a decade ago and in 2012 focused the main business on managing tax risks, handling suspected serious fraud cases and assisting clients and advisers with disclosures to HMRC.

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