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Readers' forum : EBT mess

06 December 2016
Issue: 4579 / Categories: Forum & Feedback

Dealing with old employee benefit trust tax settlement in a current self-assessment tax return.

My client was a beneficiary of an employee benefit trust (EBT) set up by his former employer in the 2000s.

In 2015-16 the employer reached a settlement with HMRC which my client was in effect forced to accept. About £2m of contributions were taxed at 41% and the tax and NICs of more than £800 000 were paid out of the fund in July 2015.

The settlement was given effect in October 2015 whereupon the trustees notified my client that there would be charges under ITA 2007 s 731 on £325 000 of ‘relevant income’ arising from inception until 5 April 2015 and a further £25 000 of relevant income arising from 6 April 2015 until the date of the settlement as well as amounts arising later. I am now struggling with how to reflect all this on the tax return. In my view the...

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