Disguised remuneration tax legislation (Part 7A of ITEPA 2003): issues for share plans and other employee benefits
The Disguised Remuneration rules in Part 7A of Income Tax (Earnings and Pensions) Act 2003 counter tax avoidance using employee benefit trusts and other intermediaries to reward employees or their family members, but are very broadly drafted. This note considers the scope of the legislation, HMRC's guidance about it and how it applies in practice, and highlights some practical difficulties it may cause for share and bonus schemes which are not avoidance schemes.
Parts of this note will be affected by Finance Bill 2014 which includes significant changes to both tax-advantaged and non-tax advantaged share schemes, including self-certification of CSOP, SIPs and SAYEs, online filing, and changes to section 222 of ITEPA 2003. For more information, see Practice note, Employee share schemes and Finance Bill 2014: summary of changes.