What are emoluments?
HMRC accept that the term “emoluments” for the purposes of section 43 is wider than just taxable emoluments. It includes money and other benefits convertible into money, even if there is no tax charge at that time the payments are made by the trustees, for example as a result of a statutory exemption. A loan to a beneficiary is not an emolument. It is simply an investment made by the EBT. At some point the loan will have to be repaid and the money will then be available to the trustee to disburse in line with the terms of the trust (which is likely to be in the form of emoluments). Will this cause anomalies? In his judgement Lord Hoffman accepted that this interpretation could lead to some employers never obtaining relief. He went on to agree with the comments of Jonathan Parker LJ in the Court of Appeal, saying that “it is the result of an arrangement into which the taxpayers have chosen to enter.” What will HMRC be doing? The Anti-Avoidance Group has set up a team to project manage t
