More than 50,000 high earners in the UK face a crackdown on offshore trusts used to avoid tax on bonuses, in a move tax planners said could disrupt the current round of bankers’ bonuses, reports the FT. The plans, unveiled by the UK Treasury on Thursday, are expected to raise £500m a year and affect about 5,000 businesses or so, ranging from big banks to single-employee companies. The attack on “disguised remuneration” is an attempt to tackle the use of employee benefit trusts in which tax-free money is put in trust for an employee who will pay tax on it only years later, if at all. They often benefit from the money in the meantime by making use of loans or property bought with the cash.
But also note, this is something that a General Anti-Avoidance Principle could have killed, easily. And then we’d be better off now.