HMRC has published settlement terms for avoidance schemes involving remuneration trusts which may allow a taxpayer to resolve any remuneration trust related tax issues. This settlement opportunity will be open for applications until 31 July 2022. It is only for individuals or companies whose scheme use meets certain criteria which are set out in the settlement terms.
The settlement opportunity is not available to any individual or company under criminal investigation by HMRC. It may also not apply if an appeal related to the tax consequences of scheme use has been referred to a tribunal.
HMRC is aware of a type of tax avoidance scheme which involves a particular type of trust, commonly known as ‘remuneration trusts’. These schemes claim that by making contributions to a remuneration trust, users can get a range of tax advantages.
According to HMRC, remuneration trust schemes do not work to deliver the ‘tax free’ environment they say they do. In HMRC’s view the scheme design may have a fundamental flaw that means there is no valid transfer of funds to the trust.
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