HMRC has recently published a new Spotlight: Spotlight 51 Remuneration trust: tax avoidance using loans or fiduciary receipts. This spotlight focuses on a tax avoidance scheme often marketed as a wealth management strategy that attempts to disguise income and other taxable profits as loans or fiduciary receipts. This scheme claims to provide remuneration or profits free of tax.
HMRC is strongly of the view that this and similar schemes do not work and that the tax savings outlined are not credible or genuine. HMRC will actively tackle the promoters and users of these arrangements.
HMRC Spotlights identify specific tax avoidance schemes of which HMRC have become aware, and that they consider are not likely to have the legal effect desired by those thinking of using them. According to HMRC, the Spotlights series is designed to be helpful to taxpayers to assist them avoid unwittingly entering into arrangements that HMRC are likely to see as tax avoidance.
In the Spotlights series HMRC:
- Provides some advice on tax planning to be wary of, listing some indicators that HMRC see as suggesting that a scheme may involve tax avoidance and which it is likely to investigate.
- Identifies specific schemes which, in HMRC's view, are not likely to deliver the tax savings advertised. Where HMRC see such schemes being used, subject to the particular facts, they will make a challenge and seek to ensure full payment of the right tax with the right due date.