Tax advice of the week: Set up an EFURBS fund

Employer Funded Unapproved Retirement Benefits Schemes (EFURBS) don’t offer the same tax advantages as approved pension funds. But there are “no set limits” on your company’s contributions or “what the money can be invested in”, says Tax Tips and Advice.

Although “your company won’t get a tax deduction for the year it makes the contribution”, it will receive relief when payments are made out of the fund to you and any other beneficiaries. You will pay tax on payments as you would with any other pension income.

EFURBS can also be a tax-efficient way to borrow from your company. If, say, John were to borrow money from his firm, Acom Ltd, Acom will have to pay tax equal to 25% of the loan. This will be repaid, but only when John settles the loan, which could take years.

“Instead, John can borrow the money from the EFURBS Acom set up for him.” He’ll avoid the 25% tax and although he’ll have to pay interest on the loan, this will go into the EFURBS and “will find its way back to John when he takes his pension”. Note, the EFURBS must be set up to allow loans.

MoneyWeek magazine

Latest issue:

Magazine cover
What a farce!

John Stepek on surviving the Greek fallout

The UK's best-selling financial magazine. Take a FREE trial today.
Claim 4 FREE Issues

From ADRs to Z scores – all the terms you wish you understood, but were too embarrassed to ask about.

Gervais Williams: if you want real dividend growth, buy small-cap stocks

Merryn Somerset Webb interviews small-cap stock expert Gervais Williams about how penny shares outperform blue chips 'again and again'.


Which investment platform is the right one for you?

When it comes to buying shares and funds, there are several investment platforms and brokers to choose from, with varying fees and charges. Find out which is best for you.


29 June 2007: Apple's iPhone goes on sale for the first time 


Apple's iPhone went on sale for the first time on this day in 2007, revolutionising the mobile phone market.


Anatomy of a Grexit: how Greece would go about leaving the euro

Jonathan Loynes and Jennifer McKeown, economists at Capital Economics, look at the key issues and challenges of a Grexit, how it might be best managed, and set out a timetable for change.