The FTT has ruled that payments to a remuneration trust were not allowable expenses (Northwood v HMRC [2023] UKFTT 351 (TC)).
The tribunal found that the “documentation was dressed up to achieve a tax benefit but this was ‘not evasion, and there was no attempt, as there would be in the case of evasion, to conceal what actually happened, however the parties chose to dress it up’.”
Nevertheless, “there was a common intention to make things appear other than as they are” and the documentation was a sham:
“I find that the contributions made to the RT, together with any associated fees, are not deductible in calculating Mr Northwood’s taxable profits because the contributions should not have been recognised as an expense in the accounts under UK GAAP and the contributions and associated fees were not wholly and exclusively for the purposes of the trade. I also find that there was an intention, by virtue of the RT documentation, to make things appear other than they were and the documentation was therefore a sham.”
https://www.bailii.org/uk/cases/UKFTT/TC/2023/TC08778.html
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