AML Tax (UK) Limited – Annuity Arrangements
- Promotor of Scheme: Annuity Arrangements
- Address: 1st Floor, Blackfriars House, Parsonage, Manchester M3 2JA
- Publication Date: 19 January 2023
- Scheme Reference Number (SRN) and date it was allocated: 10 May 2022
AML Tax (UK) Limited – Annuity Arrangements – more details
The HMRC website states the scheme operates as follows:
“There is usually a pre-existing loan between a director/shareholder (the ‘scheme user’) and their company. The user signs an ‘option agreement’ with the company. In return for signing the option agreement, the company releases the user from their obligation to repay the loan. The “option” enters the user into an annuity agreement with the company, under which the user is required to pay an annuity to the company for life, if exercised. However, an “early encashment” mechanism within the annuity agreement enables the company to cancel its option rights for a nominal fee. The company will usually cancel the option so that the scheme users do not pay the annuity or loan repayment. Therefore, the company does not pay Corporation Tax on the loan.”
For more information, visit the following page on the government’s website: Current list of named tax avoidance schemes, promoters, enablers and suppliers.
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