Lee Sharpe covers the recent background and current aspects of the disguised remuneration regime.
This article will cover the disguised remuneration regime, its origins and implications for taxpayers.
What is ‘disguised remuneration’?
‘Disguised remuneration’ describes the reward of employees other than by way of direct salary, benefits-in-kind or similar, fundamentally by using third parties. It is more than a decade old, having taken effect from April 2011, updating ITEPA 2003, Pt 7A (starting at ITEPA 2003, s 554A).
Commonly, disguised remuneration involves the effective part-replacement of ordinary salary by substantial loans made from employee benefit trusts (EBTs) that are distinct from (but clearly connected with) one’s employer. The most notorious example of those arrangements is the ‘Rangers Tax Case’ (RFC
