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Ask an expert: Joint venture: ensuring no disguised remuneration charge


My client (the trustee of an EBT) would like to provide loan finance in connection with a joint venture development company (JVCo) which is 33% owned by the main beneficiary (A) of the EBT in order to fund the conversion of a UK property into residential flats. The proposal is for the property to be purchased by a newly formed company (SPV) which would be a wholly owned subsidiary of JVCo. The potential investment was introduced to the trustee by A. The SPV would be financed by the EBT amongst others. My client is concerned to avoid triggering a charge to income tax under the disguised remuneration rules in ITEPA 2003 Part 7A.


If the SPV is a wholly owned subsidiary of JVCo then any loan made to it would be caught by ITEPA 2003 s 554C(1)(a) (payment to a relevant person) as...

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