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Court of Session rules in favour of HMRC + Rangers Issue Statement


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On STV last night a "tax expert" was asked if HMRC could pursue individuals to recover tax from the EBT scheme. He replied that as many of the beneficiaries were foreigners this would be too difficult. David Murray was the biggest beneficiary and I would have thought he could be pursued quite easily. This might be an incentive perhaps for SDM to dig into his pockets to fund an appeal to the Supreme Court?

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Rangers tax case decision ‘astonishing’ – Rebus

 

by Calum Fuller 05 Nov 2015

 

The Court of Session in Edinburgh held the corporate entity which formerly housed Rangers, now in liquidation (oldco), had illegally used the scheme between 2001 and 2010 to pay £47.65m to players and staff in tax-free loans.

 

The arrangement was challenged in the first-tier tribunal by HMRC, which said it was illegal. Rangers disputed the bill and the tribunal held the payments were loans that can be repaid and, as such, were not taxable.

 

This latest ruling by three judges at the Court of Session upholds HMRC's position and renders the EBT arrangement illegal, and according to Martin Taylor, head of client relations at Rebus Investment Solutions, with wide-ranging implications.

 

An EFRBS is an unapproved pension scheme which means that it does not share quite the same tax advantages of a conventional occupational pension scheme.

 

"This is astonishing. Unless it is overturned in the Supreme Court, it essentially blows out all EBTs and EFRBS," Taylor told Accountancy Age. "In simple terms, the court now says that the technical arguments approved by the commissioners and the tribunal in those cases should have been dismissed by an overriding ‘substance over form' argument. Most firms selling EBT and EFRB structures used very detailed and well-reasoned counsel's opinions."

 

Taylor also warned he now expects HMRC will try to close a raft of enquiries on the basis of the decision.

 

http://www.accountancyage.com/aa/news/2433486/rangers-tax-case-decision-astonishing-rebus

 

Essentially saying, that tax-experts et al selling EBTs and the previous comissions/judges were all wrong, whereas these three judges (with - according to others - no tax-decision background) brushed it aside with "a ‘substance over form' argument". I guess it raised quite a few and many more concerned eyebrows.

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http://www.accountancyage.com/aa/news/2433486/rangers-tax-case-decision-astonishing-rebus

 

Essentially saying, that tax-experts et al selling EBTs and the previous comissions/judges were all wrong, whereas these three judges (with - according to others - no tax-decision background) brushed it aside with "a ‘substance over form' argument". I guess it raised quite a few and many more concerned eyebrows.

 

Yesterday's daft ruling will get overturned at the Supreme Court and the three bewigged buffoons should never see the inside of a Scottish Courtroom ever again

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John' date='

 

If you think others will allow us to look or move forward, then with all due respect you are extremely naive.[/quote']

 

In what way D'Art? How can 'others' prevent us looking forward and focussing on the future? Others can fixate on the past if they want too but we don't have too. We can't change it now however we can change the future, we can influence what happens from this day forward. If we expend energies defending, frankly indefensible, tax avoidance schemes that have no bearing on today now anyway we're playing into the hands of those who want to do us mischief. If we accept the decision, accept we were badly led and badly advised at that time and have paid a very heavy price for it and accept there's nothing we can do about it now it really doesn't matter what 'others' say.

 

If people want to call us 'cheats' or discredit our achievements let them, feel free to respond to them, rebuff and mock them, but let's not become them. If all our efforts go towards building a better future for our club we can achieve great things again, if we stay mired fighting unwinnable battles, battles that even if we had 'won' won't change what happened to us and won't change the opinion of people who hate us anyway, then we're in danger of losing focus on what actually matters now.

 

I don't care what Chris McLaughlin and his like think of Rangers in late 90s or early 2000s, I can't do anything about that. But I can do my best to ensure that when he sees Rangers today he sees a vibrant, living club, playing attacking attractive football and shaping the sport in this country for years to come. That'll piss him off far more than appealing HMRC.

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Yeah, we know that a 'dignified silence' works, eh?

 

It's not about a dignified silence, it's about speaking clearly, loudly and intelligently about what's important. How can we defend EBTs? The best we can say is they were borderline legal and that's clearly in dispute. Accept we lost that battle but make sure we never have to fight another like it and we'll win the war.

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In what way D'Art? How can 'others' prevent us looking forward and focussing on the future? Others can fixate on the past if they want too but we don't have too. We can't change it now however we can change the future, we can influence what happens from this day forward. If we expend energies defending, frankly indefensible, tax avoidance schemes that have no bearing on today now anyway we're playing into the hands of those who want to do us mischief. If we accept the decision, accept we were badly led and badly advised at that time and have paid a very heavy price for it and accept there's nothing we can do about it now it really doesn't matter what 'others' say.

 

If people want to call us 'cheats' or discredit our achievements let them, feel free to respond to them, rebuff and mock them, but let's not become them. If all our efforts go towards building a better future for our club we can achieve great things again, if we stay mired fighting unwinnable battles, battles that even if we had 'won' won't change what happened to us and won't change the opinion of people who hate us anyway, then we're in danger of losing focus on what actually matters now.

 

I don't care what Chris McLaughlin and his like think of Rangers in late 90s or early 2000s, I can't do anything about that. But I can do my best to ensure that when he sees Rangers today he sees a vibrant, living club, playing attacking attractive football and shaping the sport in this country for years to come. That'll piss him off far more than appealing HMRC.

 

Its a very fair and valid series of point you make John, and Im in no way disagreeing with their sentiment. Its just having observed our enemies over the years - their hatred of our club rarley limits such attacks to merely the thought process.

Edited by D'Artagnan
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DEFEAT for Rangers FC in its tax dispute with HM Revenue & Customs spells the end for Employee Benefits Trusts and Employer-Financed Retirement Benefits Schemes (EFRBS).

 

The Court of Session in Edinburgh held the corporate entity which formerly housed Rangers, now in liquidation (oldco), had illegally used the scheme between 2001 and 2010 to pay £47.65m to players and staff in tax-free loans.

 

The arrangement was challenged in the first-tier tribunal by HMRC, which said it was illegal. Rangers disputed the bill and the tribunal held the payments were loans that can be repaid and, as such, were not taxable.

 

This latest ruling by three judges at the Court of Session upholds HMRC's position and renders the EBT arrangement illegal, and according to Martin Taylor, head of client relations at Rebus Investment Solutions, with wide-ranging implications.

 

An EFRBS is an unapproved pension scheme which means that it does not share quite the same tax advantages of a conventional occupational pension scheme.

 

"This is astonishing. Unless it is overturned in the Supreme Court, it essentially blows out all EBTs and EFRBS," Taylor told Accountancy Age. "In simple terms, the court now says that the technical arguments approved by the commissioners and the tribunal in those cases should have been dismissed by an overriding ‘substance over form' argument. Most firms selling EBT and EFRB structures used very detailed and well-reasoned counsel's opinions."

 

Taylor also warned he now expects HMRC will try to close a raft of enquiries on the basis of the decision.

 

http://www.accountancyage.com/aa/news/2433486/rangers-tax-case-decision-astonishing-rebus

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So, let me get this right.

9 judges in total have now sat on the case. The score is currently 5 judges to 4 in our favour, the 4 against are non-specialist in tax law. So we lose?

 

You do wonder how the previous judges take the ruling of yesterday.

 

Now the waiting game begins, whether BDO will appeal and while I am at it, is it for the same judges to decide whether an appeal will be granted? And finally, would the Supreme Court allow an appeal given the "new points of law" stuff discussed earlier?

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