By Alexander Farara, barrister, 1EC
As I write not less than 48 hours after the surprise revival of David Cameron, it is perhaps befitting to bring back into focus one of his signature policies – austerity.
Recently, I have been increasingly instructed on matters – primarily in the context of insolvency, trusts and estates – which centre on employment benefit schemes; schemes which during the early 2000s were particularly popular for their ability to legitimately avoid or limit income tax. Although these schemes took various forms, common was a type of unregistered pension scheme, created courtesy of the Income Tax (Earnings and Pensions) Act 2003, known as an employer-financed retirement benefit scheme (“EFRB”).
In essence, the scheme operated as follows. Trusts, settled by special purpos...
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