Glasgow Rangers appeal lost by HMRC... but the case continues

The former Glasgow Rangers Football Club sought to pay bonuses to its players through loaning money to them from a trust, avoiding the need to pay income tax or National Insurance contributions on the payments.

Facts of the case

  • The club’s parent company set up an employee benefit trust (EBT)
  • 108 ‘sub-trusts’ were established within the EBT for the benefit of the footballers’ families
  • The club paid a total of £55.5m and €5.3m into the ‘sub-trusts’
  • Each ‘sub-trust’ loaned money to the employee footballer. Loans were made without security for a term of ten years (which was expected to be renewable) and interest was payable at 1.5-2 per cent above the base rate
  • In theory, the loan could remain outstanding until the employee’s death, when it would be a debt on the employee’s estate (and so reduce the inheritance tax charged). However, the loan would be repaid to the sub-trust set up for the employee’s family, and so their family would still receive the money…

Click on the link below to read the rest of the Gateley briefing.

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