Rangers wins its 'big tax case', its EBT appeal. Loans made to players were genuine loans.

On appeal, HMRC v (1) Murray Group Holidings Ltd (2) Murray Group Management Ltd (3) The Premier Property Group Ltd (4) G M Mining Ltd and (5) RFC 2012 PLC (in liquidation) (formerly The Rangers Football Club plc) [2014] UKUT 0292(TCC), the Upper Tier Tribunal (UTT) has confirmed the First Tier Tribunal decision that the payments made to club employees including players and directors were genuine loans. The matter was appealed by HMRC because the loans came with side letters which gave the strong impression that the loans were remuneration. Those taking part in the EBT have not paid income tax or national insurance on funds advanced by the EBT.

Under this tax planning, which is no longer possible due to the disguised remuneration rules added into statute by Part 7a ITEPA 2003, a player could be advanced a loan and then never repay it and so escape both PAYE and IHT.

There is a twist: the old Rangers club in this case is in liquidation and it is now expected that the liqudator will demand repayment (which depends on the loan terms). HMRC is a main creditor in the liquidation and so it may stand to benefit yet. 

A further matter on termination payments was remitted back the FTT for re-consideration.

HMRC could yet appeal this decision.

Link:

UTT decision: HMRC v (1) Murray Group Holidings Ltd (2) Murray Group Management Ltd (3) The Premier Property Group Ltd (4) G M Mining Ltd and (5) RFC 2012 PLC (in liquidation) (formerly The Rangers Football Club plc

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