The Court of Session in Edinburgh has allowed HMRC’s appeal in Murray Group Holdings and others.
The Court of Session in Edinburgh has allowed HMRC’s appeal in Murray Group Holdings and others. Overturning the decision of the Upper Tribunal, the court held that sums paid into employee benefit trusts (EBTs) set up by the former Rangers Football Club were earnings subject to income tax.
Andrew Watters, tax director at law firm Thomas Eggar LLP, explained: ‘Rangers had paid monies into an EBT from which staff or their families could benefit. Monies from this principal trust went out to various sub-trusts and from them it went to various beneficiaries as loans. The question was whether the benefits received should be taxed as salary to players. In the opinion of the court, taxing such benefits as earnings of the players “accords with common sense” – this has implications beyond EBT schemes. For HMRC and the battle against tax avoidance, the ability to look through legal structures and reconstitute the tax consequences on the basis of “common sense” is the Holy Grail.’
The Court of Session in Edinburgh has allowed HMRC’s appeal in Murray Group Holdings and others.
The Court of Session in Edinburgh has allowed HMRC’s appeal in Murray Group Holdings and others. Overturning the decision of the Upper Tribunal, the court held that sums paid into employee benefit trusts (EBTs) set up by the former Rangers Football Club were earnings subject to income tax.
Andrew Watters, tax director at law firm Thomas Eggar LLP, explained: ‘Rangers had paid monies into an EBT from which staff or their families could benefit. Monies from this principal trust went out to various sub-trusts and from them it went to various beneficiaries as loans. The question was whether the benefits received should be taxed as salary to players. In the opinion of the court, taxing such benefits as earnings of the players “accords with common sense” – this has implications beyond EBT schemes. For HMRC and the battle against tax avoidance, the ability to look through legal structures and reconstitute the tax consequences on the basis of “common sense” is the Holy Grail.’
