Not worth your weight in gold

HMRC has issued a warning to companies paying their staff in gold bars as a way of reducing tax liability. Such schemes (referred to as ‘disguised remuneration’ schemes) depend on the employee paying the value of the gold to a trust at some point in the future and make the erroneous assumption that this obligation makes the initial receipt of the bullion tax-free. However, Tina Riches, head of tax at Smith & Williamson, was quoted in the FT as saying that it might suit those in receipt of ‘large, one-off payments’ such as bonuses to take them in gold. The rate of capital gains tax chargeable on receipt of an asset, such as gold, is lower than the 45 per cent rate of income tax applicable over the £150,000 annual threshold. ‘If a promoter was doing something like this, it would be an expensive scheme, which would only make sense for people who would otherwise have a very significant tax liability,’ she is reported as saying. 30.5.16