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Who is Opus Management? Opus is a progressive and forward looking tax planning consultancy. We provide tailored tax solutions to individuals and organisations. Our tax planning solutions are scrutinised and verified by leading Tax Counsel and are delivered by our highly professional team. We study each annual Finance Act in finest detail in order to provide the most up to date tax planning available within current legislation. Our Clients Professional Sports, Arts & Media Tax planning for Sports & Media has always required the ultimate in diligence with such a great spotlight on this industry. Opus Management offer a range of bespoke and highly robust tax planning structures to manage some of the truly commercial aspects such as sponsorship and image rights. Financial Market Traders and Hedge Fund Managers Recent years have seen what can only be described as punitive taxation against the UK's captains of industry. We aim to mitigate that liability as much as possible by utilising the latest legislation to give back that competitive advantage. Freelance Contractors The UK's Contracting fraternity have long been interested in Tax Planning and have become very savvy. The flexible nature of their work allows them many tax advantages over their permanent counterparts. They carry the risks associated with contract work and Opus Management assist them in maximising the contract work that they secure. Opus Management Ltd 3rd Floor The Old Courthouse Athol Street Douglas Isle of Man IM1 1LD 63 Grosvenor Street Mayfair London W1K 3JG Tax Planning for Financial Market Traders and Hedge Fund Managers A word on FMST (Focus Managed Service Trust) FMST is not an EBT Traditionally, banks and other financial institutions have Removed from the shackles of employment, the Specifics secured the services of senior and specialist individuals by structure allows the individual to determine, in an FMST has absolutely no connection or similarities with FMST is a UK settled and based Trust, administered in way of employment. The FMST structure offers distinct entirely commercial manner, when he or she will EBTs whatsoever. Northwich, Cheshire. advantages, both to the professional individual and to the become entitled to income; and hence when he or she EBTs or employee benefit trusts are trusts established by FMST is VAT registered in the UK and does all of its financial institution itself. will have to account for and pay tax on that income. a company or other employer for the benefit of its banking with Barclays Bank PLC in the UK. For the individual, the arrangement ensures that he or The individual may in practice defer entitlement to employees. They are used to provide a variety of The Trust can invoice for professional services, by she is not employed, nor deemed to be employed for income for a considerable period – possibly until he or benefits but in recent years have become notorious virtue of the incorporated STEP standard administrative the purposes of income tax legislation in the UK. This she has ceased to be resident in the UK, or until he or for providing tax-efficient loans to employees. The provisions which include an express power to trade. is significant in light of the “disguised remuneration” she has passed away. Treasury considered this to be aggressive tax avoidance, rules introduced in the Finance Act 2011 with effect In the meantime, the individual can draw on a credit and following a review introduced sweeping new rules in FMST is a truly commercial arrangement for the from December 2010. These rules have effectively put facility, secured by a charge over the rights to income December 2010 which have effectively closed the use of consummate professional, adding greater value to an end to the tax-efficient use of employee benefit that has not yet become payable. Senior tax Counsel EBTs as tax planning vehicles. your work. trusts and other employment-based arrangements, has advised that the use of this credit facility does not It should be appreciated that the trustees are bound to The FMST is not an EBT quite simply because the which formerly were used to provide high-earning trigger any tax liability – in contrast to the current follow the professional standards and ethics of their contractors whose services are provided via the trust individuals with non-taxable “soft loans” instead of treatment of loans made from employee benefits trusts respective professional bodies, and would not be remain self-employed; and so the December 2010 rules taxable bonuses. and other employment-based structures. permitted by those professional bodies to enter into do not affect it. We have advice from a senior Queen's Counsel confirming that HMRC has no mechanism under any unlawful activity. current legislation to treat those providing services At no point, while engaged by the trustees to provide A Word on Loans through the FMST as employees. services, do traders become beneficiaries of the Trust. When funds are collected by the FMST, they are invested via an independent investment company into loans. A separate loan company is able to make a tax free loan using your deferred earnings as collateral. In that way your loan is always balanced by collateral held (see diagram below). Should the loan be recalled it can be settled in a Breakdown Comparisons variety of ways depending on your circumstances at the time. The diagram below details an example operation of a loan facility, should it be required by the contractor and also £1,000,000 Net Returns on £1m Earning providing that the lender agrees terms of the requested loan. BALANCE £800,000 END CLIENT FMST (Trader’s fees +£100,000 Always balanced £100,000 retained by trustees) £600,000 £848,535 £400,000 LOAN CO. £500,444 £499,547 £498,619 £100,000 £200,000 (Loan secured by charge -£100,000 TRADER over unpaid earnings) £0 Opus Management Limited Company Partner of LLP PAYE Dividend Model The difference between the FMST and other trust based remuneration arrangements is that with the FMST you are contractually entitled to receive the fees agreed between you and the trustees in full, subject to you fulfilling all of your contractual obligations. With other trust based schemes you are merely a beneficiary of a discretionary trust, Opus Limited Company Partner PAYE with no automatic right to receive full payment for the work you do. In other words, the FMST gives you certainty and security. Management Dividend Model of LLP Is my money safe if FMST came to an end? Gross Earning £1,000,000 £1,000,000 £1,000,000 £1,000,000 If the trust ceased trading and was wound up, you would obviously cease to be contracted to provide services through the trust. Before winding up the trust, the trustees would have to distribute all the Deductions £151,465 £499,556 £500,453 £501,381 trust assets, including the benefit of loans made to former contractors. The trustees would still have their contractual obligation to pay your deferred earnings, subject to you fulfilling all your obligations. In practice, your Net Return £848,535 £500,444 £499,547 £498,619 right to deferred earnings would cancel your debt to the loan company Saving £348,091 £348,988 £349,916 NOTE: The above diagram shows very basic figures. Please remember that FMST also deduct fees for their services.
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