BIM44500 - Specific deductions: employee benefit trusts: contents

Some employee benefit trusts (EBTs) are set up to provide employees and directors with specific kinds of benefits such as shares in their employing company, pensions and other retirement benefits, accident benefits or healthcare benefits. However general-purpose EBTs have increasingly been used for tax avoidance purposes, with the aim of providing employees and directors with benefits in ways that aim to minimise or avoid liability to Income Tax and employers’ National Insurance Contributions (NICs).

In many cases the main risk may relate to Income Tax under PAYE and NICs due on amounts paid out of the EBT, rather than the availability of a Corporation Tax deduction (at some time) for the employer’s contribution. It is therefore important that staff considering deductions for employers’ contributions liaise with employer compliance staff so that all aspects of the case are considered together.

There may also be Inheritance Tax consequences if a deduction for a contribution made by a close company to an EBT is disallowed or deferred in computing the company’s taxable profits. In these cases staff considering deductions for employers’ contributions should liaise with WMBC Assets EBT Team, see BIM44550.

A full list of the contents of the guidance on deductions for employers’ contributions to EBTs is shown below. The guidance is subdivided into three main sections:

• General Matters (BIM44501 - BIM44549);
• Deductions for employers’ contributions to general-purpose EBTs (BIM44540);
• Timing of deductions for employers’ contributions to general-purpose EBTs (BIM44573).

1. BIM44501

   Introduction
2. BIM44505

   Setting up costs
3. BIM44510

   Main uses
4. BIM44515

   Used with employee share schemes
5. BIM44520

   Used with retirement benefit schemes
6. BIM44525

   Used with accident benefit schemes
7. BIM44530

   Used with healthcare trusts
8. BIM44535

   General-purpose EBTs
9. BIM44540

   General-purpose EBTs: deductions for employers’ contributions: contents
10. BIM44550

    General-purpose EBTs: deductions for employers’ contributions: introduction
11. BIM44555

    General-purpose EBTs: deductions for employers’ contributions: how to spot them
12. BIM44560

    General-purpose EBTs: deductions for employers’ contributions: capital or revenue expenditure
13. BIM44565

    General-purpose EBTs: deductions for employers’ contributions: whether wholly and exclusively
14. BIM44570

    General-purpose EBTs: deductions for employers’ contributions: timing of deductions
15. BIM44571

    General-purpose EBTs: deductions for employers' contributions: permanent disallowance of contribution
16. BIM44573

    General-purpose EBTs: timing of deductions for employers’ contributions: contents
17. BIM44575

    General-purpose EBTs: timing of deductions for employers’ contributions: introduction
18. BIM44580

    General-purpose EBTs: timing of deductions for employers’ contributions: overview
19. BIM44585

    General-purpose EBTs: timing of deductions for employers’ contributions: what it applies to
20. BIM44590

    General-purpose EBTs: timing of deductions for employers’ contributions: structure of the legislation
21. BIM44595

    General-purpose EBTs: timing of deductions for employers’ contributions: qualifying benefits
22. BIM44600

    General-purpose EBTs: timing of deductions for employers’ contributions: qualifying expenses
23. BIM44605

    General-purpose EBTs: timing of deductions for employers’ contributions: computing adjustments
24. BIM44610

    General-purpose EBTs: timing of deductions for employers’ contributions: computing adjustments: example
25. BIM44611

    General purpose EBTs: availability of deductions for employers
26. BIM44615

    General-purpose EBTs: timing of deductions for employers’ contributions: payments ‘out of’ contributions
27. BIM44620

    General-purpose EBTs: timing of deductions for employers’ contributions: transfers of assets to employees
28. BIM44630

    General-purpose EBTs: timing of deductions for employers’ contributions: interaction of Corporation Tax rules with employee share schemes deductions
29. BIM44635

    General-purpose EBTs: timing of deductions for employers’ contributions: interaction with unpaid remuneration rules
30. BIM44636

    General-purpose EBTs: timing of deductions for employers’ contributions: disguised remuneration