renumeration trusts

[css_jay99]

Hi guys,

I have a couple of questions, as I was looking at something called renumeration trust......

1) Is renumeration trust the same EBT?
2) Is it illegal?, if so why are companies still offering it as an efficient vehicle to reduce tax ...?
3) Is it OK if the renumeration trust is based on prior year retained earnings? rather current year profits liable to Corp Tax

Thanks

css_jay99

[jamesbrown]

Hi guys,

I have a couple of questions, as I was looking at something called renumeration trust......

1) Is renumeration trust the same EBT?
2) Is it illegal?, if so why are companies still offering it as an efficient vehicle to reduce tax ...?
3) Is it OK if the renumeration trust is based on prior year retained earnings? rather current year profits liable to Corp Tax

Thanks

css_jay99

New to what? Being a sockie? Well you've made an excellent start.

http://forums.contractoruk.com/accou...take-home.html

[cojak]

I've moved the 1st post as it had no reason to be in an EBT thread.

I've kept the 2nd post as I considered it a valid response - and the link was appropriate too...

[mudskipper]

remuneration

[malvolio]

As always, the question is not "Are they legal", since they are, but "Am I allowed to use them in this manner", which, probably, is not.

[ASB]

As mal says, legal is a wrong word. The question simply becomes whether they are effective and achieve stated aims.

As far as I am aware there is no such vehicle as a remuneration trust. It will be a discretionary trust of some description and governed by the appropiate legislation.

it is unclear what you expect to achieve.

If paying in retained profits these have been subjected to ct. So no benefit unless trying to reclaim ct. This would be potentially available.

When paying out trust funds this is then taxable based on what they are and what legislation then applies.

so potentially there is a tax saving.

but then im sure my partner would sleep with george clooney for a million quid.

potentially shes a millionaire. But in reality .....

[tractor]

...

With all these 'investment' vehicles follow the process below to see how the saving actually works if you have the ability to do your own shoelaces without help...

Calculate the potential saving
Double the result (2 x multiplier for the fine)

This is the total saving you will make by NOT using it.

HTH.

[jbryce]

Please don't

Hi guys,

I have a couple of questions, as I was looking at something called renumeration trust......

1) Is renumeration trust the same EBT?
2) Is it illegal?, if so why are companies still offering it as an efficient vehicle to reduce tax ...?
3) Is it OK if the renumeration trust is based on prior year retained earnings? rather current year profits liable to Corp Tax

Thanks

css_jay99

These are expensive things to run, the scheme will take <15%, pay HMRC minimal tax and transfer a lot of money into your account.

You will be happy, it's minimal hassle and you'll sleep at night.

Then HMRC will come calling, it won't matter if, at the finer level of law, the scheme is effective or not -the GAAR will probably, at some point, rule it as an avoidance scheme. The fact that these schemes have been running for 20 years will not stop HMRC addressing them at some point.

HMRC will pursue you and you will pay them a lot of money. You may, one day, get your day in court - but by that point you will have lost your house.

For a flavour of what will happen, read all the posts under scheme enquiries. If anyone joins one of these schemes after reading the posts there, then they are truly , truly f***ing stupid.

[DonkeyRhubarb]

If anyone joins one of these schemes after reading the posts there, then they are truly , truly f***ing stupid.

Yes but they could always appeal to a tribunal on the grounds of mental incompetence.

[NickNick]

but then im sure my partner would sleep with george clooney for a million quid.

potentially shes a millionaire. But in reality .....

He doesn't pay that well. £10K a month is the going rate or so I'm told.
:O)