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HMRC internal manual

Trusts, Settlements and Estates Manual

Trusts for particular purposes: employment related trusts - unfunded employer-financed retirement benefits schemes

Up until 5 April 2006 this type of scheme was known as an unfunded unapproved retirement benefits scheme (UURBS). From 6 April the scheme will be unfunded employer-financed retirement benefit scheme.

The employer makes no contributions in advance to an unfunded scheme. The employer provides benefits as and when they become due.

This means the trustees will not have any income or gains. They do not need to complete annual returns. Remind them of their obligation to notify any future chargeability to tax (TMA70/ Section 7).

We normally see funded employer-financed retirement benefits schemes (funded unapproved retirement benefit scheme or FURBS up to 5 April 2006) rather than unfunded employer-financed retirement benefits schemes as the latter do not usually involve a trust. TSEM5300 has details of funded schemes.