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Another interesting EBT (RT) case

https://www.bailii.org/uk/cases/UKFTT/TC/2021/TC08246.pdf

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A rare EBT "win" for the taxpayer (well done to the taxpayer's counsel - beating JGQC on a dodgy PB-W RT scheme is no mean feat). (A sort of pyrrhic victory though if you factor in PB-W's 10% fees.)

Looks correct to me. HMRC will be most displeased.

https://www.bailii.org/uk/cases/UKFTT/TC/2021/TC08246.pdf

I'm not sure why HMRC don't do a forced DoTAS disclosure, like they did recently here: https://www.bailii.org/uk/cases/UKFTT/TC/2021/TC08235.pdf

Interesting also the mention of the dodgy "fiduciary receipts" switch to potentially avoid the Loan Charge. See:

https://www.accountingweb.co.uk/any-answers/interesting-loan-charge-plan...

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By Justin Bryant
09th Sep 2021 10:04

Reflecting on this case further, it's not clear if the taxpayer escaped income tax on the distribution, which he might have done if HMRC had not made a protective assessment on him (HMRC appear only to have assessed the company) and if so this is yet another example of tax avoidance paying big time (I'm sure he can live without the CT deduction). Even if he's not sidestepped that income tax liability, this case will be a massive blow to HMRC (unless they successfully appeal) on (possibly over 90% of) historic EBT planning (for SMEs) due to Rangers being distinguished and also re P7A due to the conclusion in para 137.

Furthermore, this case supports/confirms my view here re Toone (EBT payments that are distributions being taxed accordingly): https://www.accountingweb.co.uk/any-answers/interesting-ebt-case-1

It also supports/confirms my view here re distributions generally: https://www.accountingweb.co.uk/any-answers/close-company-loan-to-non-pa...

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