Employee Benefit Trusts - what a relief.

Q: We have heard that Employee Benefit Trusts are very tax efficient. Can you explain what they are, and how they work?

An Employee Benefit Trust is a discretionary trust which is formed in
order to benefit existing employees of a business and their families
together with former employees.


They are formed by limited companies because the owners are classified as
employees of the company and can, therefore, benefit from the trust.


This would clearly not work for partnerships, as partners are not
employees of the partnership. The trusts are generally based in Jersey
which ensures that their income/gains accumulate tax