HomeFWJ takeawayTakeawayTax disputesDisguised remuneration and APNsWhat is an employee benefit trust?

An employee benefit trust is a trust set up specifically to hold assets to provide benefits to employees and their families.

An employee benefit trust may has in recent years been used as a tax efficient method of enabling payments or distributions of income due to employees where such payments may otherwise be subject to tax.

  • The use of an employee benefit trust to pay employees via loaned funds has in recent years been subject to a great deal of scrutiny by HMRC and as a result of various changes to the tax legislation;
  • any tax payer and employee recipient faced claims for unpaid taxes (including penalties, interest and surcharges) or charges on the loans made up to 50%, where such arrangements remained in place as at 5 April 2019.

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