*We have now seen a number of settlement proposals from HMRC in relation to Employee Benefit Trusts, “EBTs”, where the deduction for Corporation Tax has been disallowed.*
*This is in line with the decision made in the case of Wired Orthodontics Ltd & Ors v HMRC \[2023] UKFTT 17 (TC), which concerned a PAYE assessment on funds routed through an EBT.*
The publication of Spotlight 63 in October [Property business arrangements involving hybrid partnerships (Spotlight 63) – GOV.UK (www.gov.uk)](https://www.gov.uk/guidance/property-business-arrangements-involving-hybrid-partnerships-spotlight-63) and the issue of “nudge letters” this month by HMRC to users of a “hybrid scheme” designed to benefit from lower corporation tax rates and unrestricted interest relief for landlords, looks to be the start of an awakening by HMRC to the abuses of incorporation relief in the property sector.
