Executive Summary of Lazarus with Pre-GAAR Steps
Executive Summary of ‘Lazarus’ with ‘Pre-GAAR
Steps’
This document covers:
1.
2.
3.
4.
5.
6.
7.
8.
Suitable clients
The GAAR
Lazarus with Pre-GAAR Steps
Benefits and risks
Tax Counsel
Costs
Fee Clawback Service
Timelines
SUITABLE CLIENTS
Suitable clients are companies with annual pre-tax profits exceeding £250,000.
THE GAAR
The General Anti-Abuse Rule, or the “GAAR”, is new legislation which will come into effect at Royal Assent of the
2013 Finance Act. This is expected to be mid-July.
Under the GAAR, any tax planning arrangement that is “Abusive” will be counteracted on a just and reasonable basis.
However, where an arrangement is entered into before Royal Assent and all that happens post Royal Assent is the completion of that arrangement (and no “Abusive” steps are required post Royal Assent to effect completion) then that arrangement will not be caught by the GAAR.
OneE do not believe that Lazarus with Pre-GAAR Steps (described below) is “Abusive”, however it is not entirely clear at this stage where the line will be drawn and it will in all likelihood take a few years for taxpayers to have more certainty over this point.
With that in mind, OneE has designed the Pre-GAAR Steps to ensure that any deemed “Abusive” steps are taken before Royal Assent leaving the tax planning to complete, essentially on auto-pilot, post Royal Assent.
LAZARUS WITH PRE-GAAR STEPS
The company will create an employer financed retirement benefit scheme (“EFRBS”) which is an unregistered pension scheme. An EFRBS is designed to make awards from a company’s annual profits to recognise the efforts of the key personnel within the company. The purpose of the employee recognition is to secure funds for the retirement of the deserving employees.
The company will then enter into an Employee Incentivisation Plan (“the Plan”) with the key employees / Directors, which will set out the basis of employment incentives for the next 5 years. Under the contract, the company will commit to making EFRBS
Steps’
This document covers:
1.
2.
3.
4.
5.
6.
7.
8.
Suitable clients
The GAAR
Lazarus with Pre-GAAR Steps
Benefits and risks
Tax Counsel
Costs
Fee Clawback Service
Timelines
SUITABLE CLIENTS
Suitable clients are companies with annual pre-tax profits exceeding £250,000.
THE GAAR
The General Anti-Abuse Rule, or the “GAAR”, is new legislation which will come into effect at Royal Assent of the
2013 Finance Act. This is expected to be mid-July.
Under the GAAR, any tax planning arrangement that is “Abusive” will be counteracted on a just and reasonable basis.
However, where an arrangement is entered into before Royal Assent and all that happens post Royal Assent is the completion of that arrangement (and no “Abusive” steps are required post Royal Assent to effect completion) then that arrangement will not be caught by the GAAR.
OneE do not believe that Lazarus with Pre-GAAR Steps (described below) is “Abusive”, however it is not entirely clear at this stage where the line will be drawn and it will in all likelihood take a few years for taxpayers to have more certainty over this point.
With that in mind, OneE has designed the Pre-GAAR Steps to ensure that any deemed “Abusive” steps are taken before Royal Assent leaving the tax planning to complete, essentially on auto-pilot, post Royal Assent.
LAZARUS WITH PRE-GAAR STEPS
The company will create an employer financed retirement benefit scheme (“EFRBS”) which is an unregistered pension scheme. An EFRBS is designed to make awards from a company’s annual profits to recognise the efforts of the key personnel within the company. The purpose of the employee recognition is to secure funds for the retirement of the deserving employees.
The company will then enter into an Employee Incentivisation Plan (“the Plan”) with the key employees / Directors, which will set out the basis of employment incentives for the next 5 years. Under the contract, the company will commit to making EFRBS