Ministerial statement issued 6 December 2010
Draft legislation and explanatory notes issued 9 December 2010. Technical consultation ended on 9 February 2011
Finance Bill issued 31 March 2011
Legislation expected in force with effect from 6 April 2011. Forestalling provisions applied from 9 December 2010 to 5 April 2011
Anti-avoidance rule review expected by 31 October 2011
Budget 2011 given 23 March 2011
The Government is bringing in legislation to tackle arrangements aimed at reducing or avoiding tax or National Insurance liabilities when rewarding employees. The Government confirmed in the 22 June 2010 Budget that Employer Financed Retirement Benefit Schemes (EFRBS) are within the scope of this measure.
A study programme will review whether a General Anti-Avoidance Rule (GAAR) could be framed to meet the objectives of deterring and countering tax avoidance while providing certainty.
A section of the draft clauses issued on 9 December 2010 is intended to tackle "disguised remuneration", where trusts and other vehicles are used to limit liability to tax or to avoid restrictions on pension tax relief. The intention is that contributions to unregistered schemes should not benefit from tax advantages beyond the lifetime allowance and annual allowances available to registered schemes.
The 2011 Budget announced that the draft legislation issued in December 2010 would be amended to limit the impact where it is possible to identify arrangements that cannot be used for avoidance purposes. Existing pension savings would be excluded from the new measures. Sums or assets earmarked by an employer with a view to providing retirement benefits to an employee would be treated as though the amount of the sum or value of the asset was a payment of PAYE income. Regulations will be issued to apply National Insurance Contributions to such chargeable amounts.