BUDGET 2010: Expert warns of clampdown on employee benefit trusts
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Trust and estate practitioner Paul Willans has warned that Government notes on the use of trusts and other vehicles to reward employees could be a ticking bomb for advisers.
In the Government’s press notice 3 ‘Protecting Tax Revenues’, it refers to ‘future action’ on the use of trusts and other vehicles to reward employees and announces that “it intends to take action to tackle avoidance through the use of trusts and other vehicles to reward employees.”
Trust and estate practitioner Paul Willans says the loosely worded statement could put a wide range of schemes under the spotlight.
He says: “It could be that it is simply referring to the proposals for share incentive plans and company share options but the statement could be taken to read any tax planning which utilises either trusts or other special purpose vehicles. This could impact fairly conventional planning such as employee benefit trusts, employer financed retirement benefit scheme (Efurbs) and qualified recognised overseas pension schemes (Qrops)”.
Technical Connection director John Woolley says: “This may well mean a tightening of the tax rules on Employee Benefit Trusts and possibly Efurbs. This remains to be seen.”
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