Rangers ruling changes lie of the land for users of EBTs

Leading tax disputes and investigations specialist ntrusted is advising users of Employee Benefit Trust (EBT) tax planning structures to review their position and seek advice following HMRC’s victory in the case against Glasgow Rangers (04.11.15).

EBTs were used by around 5,000 companies in the UK, mostly to reward for top earners such as high level managers or sporting talent.

ntrusted which works with businesses and high-net-worth individuals to resolve ongoing tax disputes, says that HMRC will use the ruling to seek settlements on cases involving EBTs.

Lindsey Daniels, director, ntrusted said: “As well as being high profile, the Glasgow Rangers case was very much a test bed for the EBT planning model. With the ruling going in the taxman’s favour and with the judge dismissing it as ‘common sense’ and ‘self-evident’ that it was a method of ‘redirection of income’ – users of the model need to review their position and seek advice urgently.”

Following the ruling HMRC said in a statement: “As supported by the decision in this case, HMRC's view is that Employment Benefit Trust avoidance schemes do not work. HMRC will continue to settle appeals by agreement where appropriate but will if necessary continue to litigate cases where settlements cannot be agreed."

Lindsey adds: “While the ruling may still be appealed in the Supreme Court, HMRC’s confident statement is a clear signal that it will use the ruling to pressure businesses and individuals to settle. As such, ntrusted is keen to reiterate that specialist advice is essential when dealing with the taxman.”

Lindsey concludes: “I would encourage any users of EBTs to seek expert advice and be aware that they are likely to receive some form of communication from HMRC in the coming days or weeks. A second opinion from ntrusted can help you to confirm your position and decide on the best course of action.”

For further information about ntrusted and the services it offers, please visit www.ntrusted.co.uk or call 0800 652 6156.

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