Employee Benefit Trusts

I have been approached by a colleague in our corporate team to assist with setting up an employee benefit trust for a company. Although I am an experienced trust lawyer, I have never dealt with EBTs. The proposal has been put forward by the client’s accountant who appears to be advising on all matters relating to the tax position and it seems I will simply need to prepare the trust deed. I have found precedent EBTs on Practical Law and in Practical Trust Precedents but, as it’s not an area I am familiar with, is there anything I particuarly need to watch out for, or would it be better to refer this to a trust practitioner who specialises in EBTs?

Anna Howat
Chattertons Solicitors

Hi Anna

It is my understanding HMRC investigate these vehicles. Offshore EBTs providing loan backs and not paying IT or NICs that made many headlines with the pop and football community.

The scheme may be perfectly legal I’d tread carefully with HMRCs current view on EBTs.

That’s not to say an EBT does not have its place and I cast no aspersions on the accountant setting up the scheme.

Richard Bishop