Two recent opinions published by the GAAR Advisory Panel have highlighted the importance of proper operation of remuneration trust structures by trust adherents, trustees and fiduciary managers of trust property alike.
The GAAR Advisory Panel held that these particular taxpayers’ arrangements were not reasonable and amounted to abusive tax avoidance. The taxpayers were unaware of the identity of the trust’s beneficiaries and had failed to notify or make awards to any of them. Instead, unsecured loans were made back to the director of the company that had adhered to the trust in question without any form of credit checks being undertaken and without any security being sought. In other words, the trust was not used properly in the manner intended or required by law.
Publication of the GAAR Advisory Panel opinions now allows HMRC to serve counteraction and accelerated payment notices on those it considers have engaged in tax arrangements that are the same or substantially similar to the tax arrangements that were criticised in the GAAR Advisory Panel opinions.
Accelerated payment notices (APNs) are very draconian. They cannot be appealed, and taxpayers served with APNs are required to pay tax claimed by HMRC up front while any dispute is resolved.
Griffin Law can represent the interests of taxpayers, trustees, and fiduciary managers of trust property, along with those accused of being promoters or enablers of tax avoidance, in their dealings with HMRC, the tax tribunal or the courts. If representations or judicial review applications need to be made, we have the expertise to assist.
The nature of our experience in representing clients over the past 20+ years in relation to remuneration trusts and disputes relating to them, means that we can quickly identify, with or without the help of counsel, whether a particular client should settle their affairs promptly with HMRC or whether their particular circumstances mean that they can rest more easily (or even properly contest HMRC’s challenges to their structures).
As a firm of solicitors, Griffin Law cannot and will not assist any clients who are engaged in impermissible tax avoidance. As a firm, we do not promote or enable tax avoidance schemes.
If a client’s reasons for using a remuneration trust are driven primarily or principally by a desire to avoid tax, that client should and will be advised to settle their affairs promptly with HMRC. We have experience in engaging in negotiations, including through alternative dispute resolution procedures, with HMRC to resolve remuneration trust disputes as cost-effectively, quickly, and painlessly as possible in the circumstances.
If a client is able to identify genuine commercial reasons for their use of properly administered remuneration trust structures, which are commercial discretionary purposes trusts founded to promote companies’ business relationships with their customers and suppliers in the manner required by the Companies Act 2006, and their conduct falls outside of the scope of the GAAR Advisory Panel opinions and accords with best practice, Griffin Law can represent the client’s interests robustly in their dealings with HMRC, the tax tribunal and the courts.
The GAAR Advisory Panel opinions make it all the more important for clients to be properly advised as to their use of remuneration trust structures by lawyers who actually understand how those structures work. Whether a client is on the right or the wrong side of the line could be the difference between a ruinous tax bill and peace of mind.
Griffin Law is a niche firm of innovative, proactive, tenacious and commercially-minded lawyers. We pride ourselves on our close client relationships, which are uniquely enhanced by our transparent fee guarantee and a commitment to share the risks of litigation.
To receive expert legal advice or representation in respect of remuneration trusts, whether as a trust adherent, trustees or as a fiduciary manager of trust property, please contact Griffin Law at firstname.lastname@example.org or call 01732 52 59 23.
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