Has anyone any knowledge of Employees Trust funds?
It has been put to me as a suggestion for a Company I do book keeping work for. Obviously I won't be getting involved in the trust but would like to know what the Director is getting into and any pitfalls.
The Company is limited and I was told that if the Company pay into the trust it is an allowable expense before Company Tax calculation. The trustees of the fund on request then release the funds to an employee (In this case to the director). The Director then attracts lower tax liability (I think it's stated on their P11d form) this being a more tax efficient way of taking funds from the Company.
The costs to set up the fund are heavy (10%) and I believe it is a loophole due to be looked at with a possible announcement tomorrow.
Best for your client to speak to a respected tax expert, who lives and breathes tax in your local area about EBT's (Employee benefit trusts). ok may cost them £100 plus vat for an hour but will save them 10%
