Orange & Gold Blog

Draft legislation on 'Disguised Remuneration' and impact on EBTs

On 9 December 2010, the Government issued draft clauses for the Finance Bill 2011. These contained provisions in relation to 'disguised remuneration' designed to stop the tax benefits of using EBTs and EFRBS to defer income tax liabilities. The main effect of these rules is to make it very difficult to access any new benefits from any existing structures without an income tax charge on the full capital value employed - for example, if a new loan is made from an EBT the beneficiary would be taxable on the full capital value of the loan advanced.

Anybody with any value tied up within structures needs to consider the impact of these new rules on both their immediate needs and long term wealth structuring before 6 April and before entering into any new transactions.