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EBT settlements

The practical reality of what a settlement involves can prove much more difficult.

The decision of whether to take up HMRC’s open offer of settlement in relation to EBT arrangements should for most beneficiaries employers and their advisers come down to a simple question: if I were instead to litigate and win would I be any better off?

In many cases the threat of a disguised remuneration charge will mean that the answer to that question is ‘no’. The successful litigant taxpayer will in addition to the costs of fighting its case face a potential liability for income tax at 45% (plus NICs) on the current value of any relevant step. In light of that HMRC’s offer of income tax at...

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