LEEDS DESIGN INNOVATION CENTRE LOSES EMPLOYMENT BENEFIT TRUST CASE

摘要

In another landmark decision for HMRC, Leeds Design Innovation Centre has lost a case at the First Tier Tribunal (FTT) over an employment benefit trust (EBT). The FTT dismissed the taxpayers' appeal finding that loans made under an EBT were to be taxed as 'cheap loans' or 'beneficial loans' as no interest was paid on the loan agreements for the years in question. In the case of HMRC v Leeds Design Innovation Centre Ltd [2014] UKFTT 009 (TC), Mr Noble and Mr Connolly are directors of Leeds Design Innovation Centre Ltd and Mr Watkiss is an employee of the company. The company set up an EBT with the trustee of the EBT being a Guernsey resident entity. The EBT lent funds to a British Virgin Islands entity, AE Ltd (AE), which made loans to Noble and Connolly (the directors) and Watkiss.