Budget Analysis 2011 – Anti-avoidance

6. Anti-avoidance Measures

a. Sale of Lessor Companies

New legislation will be introduced in Finance Bill 2011 to ensure that the anti-avoidance measures in relation to the sale of lessor companies continue to be effective.  The new rules will ensure that corporation tax is not avoided through a change of ownership.  These measures are a response to a disclosed tax scheme.

b. Disguised Remuneration

New provisions will tax employees on income provided through trusts or other intermediate vehicles. An income tax charge will arise where, using such vehicles:

  • sums or assets are earmarked for employees;
  • loans are provided to employees; or
  • assets are provided to employees.

Where an employer earmarks assets with a view to a trust or other intermediary providing retirement benefits to the employee these will also be caught.

Draft legislation was published in December 2010 for consultation and since that date HMRC has release some FAQs.  Amended legislation will be released in the Finance Bill.  The new rules are effective from 6 April 2011 but anti-forestalling provisions will catch transactions between 9 December 2010 and 5 April 2011.