Tax avoidance - issues for IPs
With the release of the Paradise Papers, the spotlight has been shone on high profile abuses of tax legislation, where individuals have subverted the letter of the law to reduce their personal tax position, often in the sum of hundreds of thousands of pounds.
Such transactions are artificial and highly contrived, serving no commercial purpose other than to escape the obligation to pay tax.
Historically, cash rich businesses have invested their funds in Employee Benefit Trusts (EBT) and other offshore Trust Structures, which are known tax avoidance schemes and have been given scheme reference numbers under HMRC’s Disclosure of Tax Avoidance Schemes (DOTAS) regime. These schemes are not approved by HMRC.