9th December saw the issue of proposed new legislation in respect of the above.
It had been coming – Spotlight 6 (issued in mid 2009) highlighted a couple of areas of concern that HMRC had on how certain tax boutiques were implementing structures that purported to obtain a corporation tax deduction without any corresponding “qualifying benefits” being paid out.
Whilst there still appear to be various inconsistencies in the proposals (for example, what happens when a loan is repaid by the recipient?), what seems pretty clear is that those individuals who own their own company, and use it to simply fund EBTs & EFURBS and then access those funds by way of “cheap” loans, they are now well and truly within HMRCs sights.
The reality is of course, they always were….however we continue to see poor advice in this area and I suspect many PI policies could be under review shortly as individuals on the receiving end of such advice may begin to question the quality, and also perhaps the genuine integrity of those advisers behind that advice.
EBTs in particular still offer some interesting tax opportunities, but as always, these need looking at in the context of a client’s particular circumstances, and not sold as a “one fits all” solution without knowing what issues are facing the client!