The Court of Appeal has ruled that a payment made to an employee benefit trust and then loaned to an employee is not taxable as earnings. The Court’s reasoning includes that:
- The Supreme Court’s decision in RFC 2012 Plc [2017] UKSC 45 (Rangers) is distinguishable as it was common ground by the time that the case reached the Supreme Court that the payments to the trust were remuneration;
- In determining whether a payment has the character of remuneration it is necessary to decide not only why it was paid but to determine its nature;
- A payment made to a third party to fund an employee benefit is not itself a taxable emolument;
- The advancement of a loan will not generally amount to a payment of earnings.
Ben Elliott acted for the taxpayer, instructed by Charles Russell Speechlys.
You can read a copy of the judgment here.
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