Payments to an EBT to avoid income tax and NICs did not have a ‘prohibited purpose’
In C Purkiss (as liquidator of Ethos Solutions Ltd) v T Kennedy and others[2025] EWCA Civ 268 (Ch) (14 March) the Court of Appeal (CA) held that payments to an employee benefit trust (EBT) intended to avoid income tax and NICs did not have a ‘prohibited purpose’ of prejudicing the interests of HMRC in respect of a claim it may have made for the unpaid tax liabilities.
Ethos Solutions Ltd operated a disguised remuneration scheme whereby payments were made to an EBT without deducting income tax or NICs. The trustee of the EBT paid the amounts into sub-trusts for the respondents and on request transferred the money to them in the form of discretionary loans.
On 4 December 2012 HMRC issued determinations assessing the company as liable for income...
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Payments to an EBT to avoid income tax and NICs did not have a ‘prohibited purpose’
In C Purkiss (as liquidator of Ethos Solutions Ltd) v T Kennedy and others[2025] EWCA Civ 268 (Ch) (14 March) the Court of Appeal (CA) held that payments to an employee benefit trust (EBT) intended to avoid income tax and NICs did not have a ‘prohibited purpose’ of prejudicing the interests of HMRC in respect of a claim it may have made for the unpaid tax liabilities.
Ethos Solutions Ltd operated a disguised remuneration scheme whereby payments were made to an EBT without deducting income tax or NICs. The trustee of the EBT paid the amounts into sub-trusts for the respondents and on request transferred the money to them in the form of discretionary loans.
On 4 December 2012 HMRC issued determinations assessing the company as liable for income...
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