Employee benefit trusts

Understand how the loan charge affects you if you have an Employee Benefit Trust (EBT).

 

Widely used over the last 20 years, EBTs have been the target of some extremely aggressive legislation from HMRC, culminating in the “loan charge” which took effect in April 2019. Any outstanding loans made through an EBT are now subject to the loan charge.

Hundreds of people who will be affected by this are still unaware of the charge. The rules are complex and depend on the type of trust used, whether the original employer is still in existence and whether there were any open enquiries into the scheme in the first place.

Behind the scenes there are moves to challenge the legislation with a judicial review, and so the coming months will be of significant interest to the many thousands of taxpayers who have been affected, many unfairly, by this legislation.

It is still a moving feast and our specialists are keeping abreast of developments on a daily basis.

The one thing you should not do is put your head in the sand and hope the problem will go away.

We are always happy to have an initial free of charge conversation to discuss your circumstances and steer you in the right direction.

This guidance is generic in nature and does not constitute advice. You should take no action based upon it without consulting ourselves or your own professional advisor.

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