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Disguised remuneration (employment income provided through third parties)

E4.1051 Introduction to disguised remuneration

Income tax and NIC charges were introduced in 2011¹ which applies to third party arrangements, commonly involving trusts and other intermediate vehicles, used by employers, directors and employees to avoid, reduce or defer income tax and NIC liabilities on what is in substance a reward of an employment or to avoid restrictions on pensions tax relief. This charge on employment income provided through third parties, widely known as the charge on disguised remuneration, is based on the full benefit of a sum of money paid or assets provided in the case of:

1. Ìý

   •ÌýÌýÌýÌý certain loans of money or assets by third parties to the employee

2. Ìý

   •ÌýÌýÌýÌý the earmarking of money or assets for the employee by a third party and in very limited cases by the employer, and

3. Ìý

   •ÌýÌýÌýÌý the outright payments of money or transfers of assets to the employee by a third party

where