HMRC has added spotlight 51 to the list of schemes it is actively investigating, involving the use of remuneration trusts to disguise income and other taxable profits as loans or fiduciary receipts.
These schemes are marketed by firms offering wealth management strategies. The scheme users, who could be self-employed individuals, partnership members, companies or company directors, contribute to a remuneration trust, with trustees based offshore.
While the beneficiaries of the trust are said to be individuals, other than the scheme users, who are engaged in the business of lending money, payments are routed through personal management companies set up and controlled by scheme users or connected parties. HMRC says it understands scheme users are told that they will always remain in control of the funds.
The scheme users access these funds in the form of unsecured loans or fiduciary receipts from the personal management company.
HMRC’s view of such arrangements is that:
corporation tax, PAYE, NICs and IHT are all chargeable for company and company director users; and
deductions claimed by self-employed individuals and partnerships are not allowable expenses, and IHT is chargeable.
HMRC has added spotlight 51 to the list of schemes it is actively investigating, involving the use of remuneration trusts to disguise income and other taxable profits as loans or fiduciary receipts.
These schemes are marketed by firms offering wealth management strategies. The scheme users, who could be self-employed individuals, partnership members, companies or company directors, contribute to a remuneration trust, with trustees based offshore.
While the beneficiaries of the trust are said to be individuals, other than the scheme users, who are engaged in the business of lending money, payments are routed through personal management companies set up and controlled by scheme users or connected parties. HMRC says it understands scheme users are told that they will always remain in control of the funds.
The scheme users access these funds in the form of unsecured loans or fiduciary receipts from the personal management company.
HMRC’s view of such arrangements is that:
corporation tax, PAYE, NICs and IHT are all chargeable for company and company director users; and
deductions claimed by self-employed individuals and partnerships are not allowable expenses, and IHT is chargeable.
