- On 18 July 2023 HMRC launched a consultation on proposals for targeted reform to the EOT and EBT tax regimes. The aim of the consultation was to ensure that the tax regimes for EBTs and EOTs remain focused on the targeted objectives of rewarding employees and encouraging employee ownership, whilst preventing tax advantages being obtained through use of these trusts outside of these intended purposes.
- The scope of this consultation included proposal to:
- ensure that the tax reliefs associated with EOTs meet the policy objectives underpinning those reliefs
- restrict the availability of the inheritance tax exemptions available to EBTs where participators in the company in which shares are held, and persons connected to them, are able to benefit from the EBT above certain limits.
- The previous government were due to analyse the consultation responses and publish an update.
- Timing: the consultation closed on 25 September 2023. It is not clear whether the current government is considering the outstanding issues.
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