Law Lord who gave Rangers defeat over EBTs...

[ian1964 10,724]

...wants to continue hammering high earners who avoid tax.

 

LORD Drummond Young wasn't shy about his forthright views on the validity of earnings being converted to loans.

 

THE law lord who handed down the crushing Rangers tax case defeat expects a “brutally realistic” view of tax avoidance schemes from courts in future.

 

Lord Drummond Young hammered home his view that high earners paid through trusts are breaking tax law.

 

He said precedent was set in UK courts as far back as 1904.

 

His observations demolish the validity of earnings being converted to loans and come as the Rangers case is being appealed at the UK Supreme Court.

 

HMRC won a victory in their battle with Rangers and ex-owners Murray Group when the Court of Session, Scotland’s top court, ruled the use of Employment Benefit Trusts breached regulations.

 

That overturned two tax tribunal rulings in favour of Rangers in the so-called “big tax case”.

 

The ruling would have left Rangers oldco with a bill for non-payment, interest and penalties of tens of millions of pounds.

 

Last November, Lord Drummond Young and fellow judges Lord Carloway and Lord Menzies ruled it was “common sense” that payments made to high-earning players from 2001 to 2009 via EBTs were earnings and not loans.

 

That judgment is now to be tested in the Supreme Court.

 

But in a highly unusual move, Lord Drummond Young pulled no punches addressing more than 100 legal and tax professionals at a seminar in Edinburgh.

 

He said complex arguments put up by lawyers defending such schemes amounted to the “wealthy and well-informed” being able to contest that “tax is only for the little people”.

 

He said such schemes amounted to “elaborate devices to re-direct payments to family members”.

 

He added: ”As you are probably all aware given the amount of publicity that the case received for non-legal reasons, Murray Group were concerned with the tax affairs for a group of companies headed by Sir David Murray, the best known of which was Rangers Football Club.

 

“In April 2001, one of the companies, Murray Group Management Ltd, set up an Employee Remuneration Trust, known as the ‘principle trust’. This formed the basis of a scheme involving more than 100 sub-trusts, each in the name of an individual employee... to the benefit of the families of those employees.Those employees comprised both those involved in the management of the various group companies and footballers employed by Rangers Football Club.

 

“What happened was that the group company gave monies into the principle trust with the direction that a

sub-trust should be established and funded for the benefit of the family of one of the company’s employees.

 

“The trustees and sub-trust extended a loan facility available to the employee which then enabled him to obtain immediate access to the funds that were paid to the sub-trust on his behalf.”

 

Having laid bare how the trusts worked, Lord Drummond Young then trashed the idea that such payments were loans.

 

He said they were clearly made as a result of the employee’s exertions and the actions of players’ agents in trying to get the best deals for clients was a “decisive” factor in showing that EBTs were earnings and not loans.

 

He said of Sir David Murray’s scheme: “The existence of the structure of principle trusts and sub-trusts was clearly to derive benefits for the families of employees.”

 

His address was titled The Rangers Case: HMRC v Murray Group Holdings – Substance and form – the triumph of reality over language? It fully backed his Court of Session ruling. He also said there were now clear precedents for courts to take a “brutally realistic” view of such schemes in future.

 

When he handed down his ruling last year, Rangers said: “The Rangers Football Club and the entities which currently own and manage it are not party to these proceedings nor do we have any say in what happens.

 

“The proceedings are a matter for those affected by them.”

 

http://www.dailyrecord.co.uk/news/scottish-news/law-lord-who-gave-rangers-9287653

[der Berliner 3,747]

Perhaps someone would ask the EBT users to start paying their loans back ... say 10 pounds per year?

 

BTW, what are the chances that the Supreme Court dismiss this "common sense" stuff as being beyond the legal means of the tribunal?

[the gunslinger 3,366]

Sounds like a person agenda. Not sure judges are allowed those.

 

 

[Uilleam 5,948]

I am inclined to the view that our learned friend is in fact our learned enemy, for reasons about which I can only speculate.

Edited November 19, 2016 by Uilleam

[ian1964 10,724]

I am inclined to the view that our learned friend is in fact our learned enemy, for reasons about which I can only speculate.

 

[Uilleam 5,948]

Cardinal O’Brien presents Papal knighthood at Red Mass

Cardinal Keith O’Brien was the main concelebrant at the annual Red Mass at St Mary’s Cathedral, Edinburgh, on Sunday, marking the opening of the new legal year in Scotland.

 

Sunday’s Mass was an extra special occasion for Lord Gill, the Lord Justice Clerk of Scotland, when his outstanding service to public life in the country was recognised. Cardinal O’Brien, representing Pope Benedict XVI, bestowed upon him the Papal Knighthood.

 

Joining the cardinal and Lord Gill at Sunday’s Mass, were various members of the legal profession in Scotland and their families, including Lord Gill’s fellow judges, Lord Hardie, Lord Drummond Young, Lord Matthews and Lord Doherty.

 

Also present were Frank Mulholland QC, the Lord Advocate, Richard Keen QC, Dean of the Faculty of Advocates, and Austin Lafferty, vice president of the Law Society of Scotland.

 

In his homily at Sunday’s Mass, Cardinal O’Brien urged Catholic lawyers in Scotland to remain strong and true to their religious beliefs.

 

You can read the rest here; http://www.sconews.co.uk/news/12774/cardinal-o%E2%80%99brien-presents-papal-knighthood-at-red-mass/

[der Berliner 3,747]

At times you wonder whether it would make sense to challenge these judges holding tribunals on grounds of bias. Then again, those making the decisions on that would come from the same clan. In any case, the BDO folk might throw in a line or two about this in their appeal to the SC.

[chilledbear 16]

Sounds like a person agenda. Not sure judges are allowed those.

 

Their beliefs always come first, always been the case no matter their profession.

[StuGers 477]

...wants to continue hammering high earners who avoid tax.

 

LORD Drummond Young wasn't shy about his forthright views on the validity of earnings being converted to loans.

 

THE law lord who handed down the crushing Rangers tax case defeat expects a “brutally realistic” view of tax avoidance schemes from courts in future.

 

Lord Drummond Young hammered home his view that high earners paid through trusts are breaking tax law.

 

He said precedent was set in UK courts as far back as 1904.

 

His observations demolish the validity of earnings being converted to loans and come as the Rangers case is being appealed at the UK Supreme Court.

 

HMRC won a victory in their battle with Rangers and ex-owners Murray Group when the Court of Session, Scotland’s top court, ruled the use of Employment Benefit Trusts breached regulations.

 

That overturned two tax tribunal rulings in favour of Rangers in the so-called “big tax case”.

 

The ruling would have left Rangers oldco with a bill for non-payment, interest and penalties of tens of millions of pounds.

 

Last November, Lord Drummond Young and fellow judges Lord Carloway and Lord Menzies ruled it was “common sense” that payments made to high-earning players from 2001 to 2009 via EBTs were earnings and not loans.

 

That judgment is now to be tested in the Supreme Court.

 

But in a highly unusual move, Lord Drummond Young pulled no punches addressing more than 100 legal and tax professionals at a seminar in Edinburgh.

 

He said complex arguments put up by lawyers defending such schemes amounted to the “wealthy and well-informed” being able to contest that “tax is only for the little people”.

 

He said such schemes amounted to “elaborate devices to re-direct payments to family members”.

 

He added: ”As you are probably all aware given the amount of publicity that the case received for non-legal reasons, Murray Group were concerned with the tax affairs for a group of companies headed by Sir David Murray, the best known of which was Rangers Football Club.

 

“In April 2001, one of the companies, Murray Group Management Ltd, set up an Employee Remuneration Trust, known as the ‘principle trust’. This formed the basis of a scheme involving more than 100 sub-trusts, each in the name of an individual employee... to the benefit of the families of those employees.Those employees comprised both those involved in the management of the various group companies and footballers employed by Rangers Football Club.

 

“What happened was that the group company gave monies into the principle trust with the direction that a

sub-trust should be established and funded for the benefit of the family of one of the company’s employees.

 

“The trustees and sub-trust extended a loan facility available to the employee which then enabled him to obtain immediate access to the funds that were paid to the sub-trust on his behalf.”

 

Having laid bare how the trusts worked, Lord Drummond Young then trashed the idea that such payments were loans.

 

He said they were clearly made as a result of the employee’s exertions and the actions of players’ agents in trying to get the best deals for clients was a “decisive” factor in showing that EBTs were earnings and not loans.

 

He said of Sir David Murray’s scheme: “The existence of the structure of principle trusts and sub-trusts was clearly to derive benefits for the families of employees.”

 

His address was titled The Rangers Case: HMRC v Murray Group Holdings – Substance and form – the triumph of reality over language? It fully backed his Court of Session ruling. He also said there were now clear precedents for courts to take a “brutally realistic” view of such schemes in future.

 

When he handed down his ruling last year, Rangers said: “The Rangers Football Club and the entities which currently own and manage it are not party to these proceedings nor do we have any say in what happens.

 

“The proceedings are a matter for those affected by them.”

 

http://www.dailyrecord.co.uk/news/scottish-news/law-lord-who-gave-rangers-9287653

 

A lot of hot wind but nothing about the actual Law. I don't like the fact that people can skip round it but until the law is set properly, they can't go about taking people to court on "common sense" judgements.

[pete 2,499]

I disagree with him that a law case should be decided on common sense. Laws should be built on common sense but it is not a judges place to change laws to suit his opinion. It is up to parliament to make sure the laws are built on common sense. The question is: Were EBT's within the law at that time?

Further I will say I totally agree with him, people should not be allowed to avoid paying tax by using such schemes. The law has\had to be changed but you cannot change it with retroactive effect.