When partners resign or retire from a partnership, the partnership agreement will normally govern their rights and responsibilities following their resignation. However, where the terms of their departure are not agreed, are they entitled to the value of...
Funded Unapproved Retirement Benefit Schemes (FURBS) were a popular tax-planning device for higher-paid employees until legislation in 2006 made them ineffective by making contributions to a FURBS no longer qualify for tax relief.
One of the advantages of FURBS was that the employer’s contributions were made without National Insurance (NI) contributions becoming payable.
In a test case, HM Revenue and Customs (HMRC) claimed that the employer’s contribution to a FURBS was in effect simply the employee’s earnings, but deferred, and therefore the employer’s contributions to the scheme should carry NI contributions.
The Supreme Court has now rejected this argument, Lord Hodge commenting that, “The first and principal reason is that the ordinary man on the underground would consider it to be counter-intuitive that a person would earn remuneration both when his employer paid money into a trust to create a fund for his benefit and again when at a later date that trust fund was paid out to him.”
HMRC regularly attack ‘tax-saving’ schemes which they regard as artificial. Anyone contemplating using such a scheme should take sound professional advice.
