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HMRC internal manual

Trusts, Settlements and Estates Manual

Trusts for particular purposes: employment-related trusts - about funded unapproved retirement benefits schemes (FURBS) (up to 5 April 2006) and employer-financed retirement benefit schemes (EFRBS) (from 6 April 2006)

The guidance covers the position for FURBS up to 5 April 2006 and funded EFRBS from 6 April 2006.

It will usually be clear from the title of the trust when it is a funded unapproved retirement benefits scheme (FURBS) or a funded employer-financed retirement benefits scheme (EFRBS). But the title may sometimes include another description such as

  • funded unapproved pension plan
  • supplementary benefits plan
  • sponsored superannuation scheme
  • supplementary life assurance scheme
  • pension and death benefits plan (or scheme)
  • retirement and death benefits plan (or scheme)

In a FURBS or EFRBS the employer makes contributions in advance to the scheme trustees. The trustees use these and any income they generate to pay benefits when a member retires or dies. The relevant tax office considers what relief is due to the employer for contributions.

Up until 5 April 2006 contributions made by an employer to what was a non-approved retirement benefits scheme (FURBS) were chargeable on employees as employment income. From 6 April 2006 all schemes that were previously unapproved retirement benefit schemes automatically become employer-financed retirement benefit schemes. From 6 April 2006 there is no charge on contributions to an EFRBS made by an employer.

‘For details of the NICs position on payments into, and out of, a FURBS and EFRBS, see TSEM5350’.

Tax position of the trustees

The schemes are essentially discretionary trusts (TSEM1565). If they are established for the sole purpose of providing ‘relevant benefits’ for periods up to 5 April 2006 they escape the charge to tax at the rate applicable to trusts. The exemption was at ICTA88/S686 (2)(c)(i). From 6 April 2006 this exemption is abolished.

There are instructions at.

For periods up to 5 April 2006 ‘relevant benefits’ is defined at ICTA88/S612(1). Further information on EFRBS is contained in the summary sheet at TSEM5350.