FURBS & transfers in specie

Some employers have made contributions to FURBS not in cash but by means of transferring assets in specie. Such transfers were said to be outside of s. 595 ICTA (as was) and, therefore, not liable to income tax nor NIC.

This highly optimistic, literal construction of the law has predictably been held incorrect by both the Special Commissioners and, latterly, the High Court in Irving v R & C Commrs [2007] EWHC 147.

A surprisingly large number (to the writer, at least) of individuals are now finding themselves being assessed, but without recourse to the underlying funds which are held in the FURBS. There are a number of approaches which may merit investigation with a view to ameliorating this problem, and which should include an examination of the formalities at the time of the original trust creation or the transfer of assets. Lack of observance of formalities may cause the transfer of beneficial ownership to have failed, leaving the assets concerned being held by the FURBS trustees on resulting trust for the employer (in effect, reversing the purported transfer ab initio).