Avoiding 50% tax: Cheap loans and EBTs
Will cheap loans save you tax? Nichola Ross Martin explores the whys and wherefores of HMRC’s latest business briefing on close company EBTs.
With a 50% ‘super tax’ fast approaching, the idea of taking cheap company loans instead of cash remuneration is looking increasingly attractive for many higher paid directors and employees. However, you cannot take a long term loan from your company without the company incurring a tax charge under section 419 of the 1988 Income Tax Act (ICTA 1988).