ITEPA 2003 – sections 554AA(1)(c) and 554AB

For any set of arrangements to pass through the CCG, it is necessary for the company to enter into a relevant transaction. This is defined in section 554AB.

The tax avoidance schemes marketed to owner managed close companies generally involved the company settling a sum or an asset into a trust. The beneficiaries of the trusts set up often included family members or suppliers to the company. The trusts excluded employees from being beneficiaries but did give them the power to make loans to employees. The trusts were set up simply as a vehicle for a payment to be made to the employee or director.

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