Disguised remuneration (or employment income provided through third parties) meaning

Private Client England & Wales glossary A Abatement When, after settling the deceased’s funeral costs, debts and liabilities, the remaining estate cannot satisfy all legacies in full, the gifts are reduced accordingly, unless the Will shows a different intention. In a solvent estate, the order for reduction appears in Part II of Schedule 1 to the Administration of Estates Act 1925. Refer to Practice Note: Payment of legacies. Accruals basis Where income is taxed on an accruals basis, it is attributed to a given tax year by reference to the number of days within that year during which the activity giving rise to the liability accrued. See Practice Note: What is the basis of income tax?. Accumulation and maintenance (A&M) trust A form of non‑interest in possession trust designed to benefit children and young people up to 25, which received favourable inheritance tax treatment between 1975 and 2006. See Practice Note: Accumulation and maintenance trusts—IHT [Archived]. Accredited Legal Representative (ALR) ...

In addition to cash pay, such as wages or salaries, many remuneration packages also contain non-cash elements, for example the provision of a car, health insurance or childcare. An employer may likewise settle particular costs on behalf of the employee, for instance a home landline, or utility bills. These non-cash earnings are commonly described as benefits-in-kind, or simply benefits. Non-cash earnings can be brought into charge to income tax on employment income under a range of provisions, including: the charge on earnings in section 62 of Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003)—if the benefit constitutes money's worth; specific provisions in ITEPA 2003, Part 7 relating to the provision of employment-related securities and securities options (see Practice Note: Employment-related securities—overview and the related Practice Notes); the disguised remuneration provisions in ITEPA 2003, Part 7A—which should be considered particularly if the non-cash earnings are provided through a third party rather than the employer, and the benefits code in ITEPA 2003, Part 3....