Court of Appeal Confirms Genuine EBT Loans not Taxable as Earnings (Pre-Disguised Remuneration Rules)

Short summary

A UK Court of Appeal confirmed that genuine, enforceable loans made through employee benefit trusts (EBTs) escape employment income tax—but this precedent applies only to pre-2007 arrangements with real repayment obligations. Modern EBTs typically face immediate tax charges under the 'disguised remuneration' rules. Businesses holding historic EBT arrangements should seek specialized advice given ongoing HMRC scrutiny.

• •Pre-2007 genuine EBT loans with enforceable repayment obligations are not taxable as employment income
• •Modern EBTs fall under 'disguised remuneration' rules that impose immediate tax charges
• •Historic EBT arrangements require fact-specific legal analysis due to HMRC focus

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