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Settlement opportunity for remuneration trust avoidance schemes

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HMRC has published settlement terms for companies or individuals who have used certain tax avoidance schemes involving remuneration trusts. HMRC report that these schemes do not work to deliver the ‘tax free’ environment they claim and that the scheme design may have a fundamental flaw resulting in no valid transfer of funds to a trust. The settlement is only open for individuals or companies whose scheme use meets certain criteria which are set out fully in the terms. 

The settlement opportunity does not apply to individuals or companies under criminal investigation by HMRC. It may also not apply if an appeal related to the tax consequences of scheme use has been referred to a tribunal. Where a court rules that tax is due on an alternative basis, the settlement terms will be withdrawn and HMRC will expect any scheme users who have not already settled to pay tax in accordance with the court’s ruling. 

To apply for the settlement opportunity, users must follow the settlement terms to decide which basis applies, complete their own tax calculations and give HMRC their completed calculations before 31 July 2022, which is the date the settlement opportunity closes.

In response, Ray McCann, past president of the CIOT, tweeted ‘you will need a lawyer to understand [the terms of the settlement]. It is baffling why HMRC makes things so complicated!’
Issue: 1572
Categories: News