BN66 - Time to fight back (Chapter 3)

[TheBarCapBoyz]

Was Steed a loan scheme, or one that gets caught by BN66?

It's caught by BN66. One of the gang received the same letter as the Montp letter, ie he has to re-submit his tax return.

[TheBarCapBoyz]

Welcome to the discussion.

Putting stuff in your wife's name won't help because they will check to see if you've disposed of any assets. (Although you might be OK if you divorced and let her take you to the cleaners. )

HMRC's case is very weak so, as Brillo says, there's no need to consider drastic action at the moment.

That is correct; transferring assets prior to bankruptcy is a bad idea.

That is even true if you transfer assets as part of a divorce settlement. That still won't put the assets beyond the reach of creditors, as was decided in a recent landmark court case

http://www.brownejacobson.com/public...ettlement.aspx

[DonkeyRhubarb]

That is even true if you transfer assets as part of a divorce settlement. That still won't put the assets beyond the reach of creditors, as was decided in a recent landmark court case

http://www.brownejacobson.com/public...ettlement.aspx

I stumbled upon the first part of the Hill case a few months ago but the article I read was published prior to the successful appeal by the trustees. That's why I thought it would be OK.

Thanks for pointing this out.

[TheBarCapBoyz]

I stumbled upon the first part of the Hill case a few months ago but the article I read was published prior to the successful appeal by the trustees. That's why I thought it would be OK.

Thanks for pointing this out.

Yeah sounds like this would have worked until fairly recently.

[ChimpMaster]

No doubt a noob question at this point - but how do HMRC know that you have been using loophole? Do they just check your scheme number (on the Tax Return) assigned to MTM or Steed?

[DonkeyRhubarb]

No doubt a noob question at this point - but how do HMRC know that you have been using loophole? Do they just check your scheme number (on the Tax Return) assigned to MTM or Steed?

The income was declared on the foreign income pages of the tax return, with specific reference made to the DTA exemption. So, even before the disclosure rules were introduced in 2004, use of the loophole was obvious to HMRC. This is why they caught virtually all of the initial group of 200 people when the first year (2001/2) tax returns went in.

It's just a pity that after opening those 200 enquiries in 2003, they then sat on their arses for 5 years before doing anything about it.

And, do you know why they didn't do anything about it? Because they had already done deals with some users, most likely property developers. I also heard this independently from an ex-HMRC inspector, though a friend of a friend.

http://www.freshfields.com/publicati.../nov08/BTR.pdf

Pressed further, she [Jane Kennedy] said:

‘‘I hope I get this right. It is because HMRC has not consistently made the case throughout the time period that the scheme does not work,. . .’’

This reply raises some interesting possibilities. Could it mean that HMRC made concessions that they later came to regret and that the only way out of the hole they had dug for themselves was to use retrospective legislation?

[BrilloPad]

The income was declared on the foreign income pages of the tax return, with specific reference made to the DTA exemption. So, even before the disclosure rules were introduced in 2004, use of the loophole was obvious to HMRC. This is why they caught virtually all of the initial group of 200 people when the first year (2001/2) tax returns went in.

It's just a pity that after opening those 200 enquiries in 2003, they then sat on their arses for 5 years before doing anything about it.

And, do you know why they didn't do anything about it? Because they had already done deals with some users, most likely property developers. I also heard this suggested, though a friend of a friend, by an ex-HMRC inspector.

http://www.freshfields.com/publicati.../nov08/BTR.pdf

Pressed further, she [Jane Kennedy] said:

‘‘I hope I get this right. It is because HMRC has not consistently made the case throughout the time period that the scheme does not work,. . .’’

This reply raises some interesting possibilities. Could it mean that HMRC made concessions that they later came to regret and that the only way out of the hole they had dug for themselves was to use retrospective legislation?

"Professional bodies were less than impressed that retrospective legislation was being used. During the debate we heard that the Chartered Institute of Taxation thought it was ‘‘extreme and unjustified’’; the Law Society believed it was ‘‘wrong in principle’’; and the Institute of Chartered Accountants in England and Wales warned, ‘‘it sends out a very damaging signal about the stability of the UK tax system’’. TheMinister could only promise to check the representations she had received."

DR : could you add your post to the list of those on page 1? IMO a very useful one.

BP
PS Due to my impending benchdom I should have plenty of time to attend the JR!

[DonkeyRhubarb]

DR : could you add your post to the list of those on page 1? IMO a very useful one.

BP
PS Due to my impending benchdom I should have plenty of time to attend the JR!

Will do. Sorry to hear about your benchdom. I'm sure you will not be alone as this recession deepens.

[poppy01]

Will do. Sorry to hear about your benchdom. I'm sure you will not be alone as this recession deepens.

me too, I'll be insolvent long before BN66 is resolved, gives me a little bit of comfort they wont get a dime out of me

[kiwinlondon]

"Professional bodies were less than impressed that retrospective legislation was being used. During the debate we heard that the Chartered Institute of Taxation thought it was ‘‘extreme and unjustified’’; the Law Society believed it was ‘‘wrong in principle’’; and the Institute of Chartered Accountants in England and Wales warned, ‘‘it sends out a very damaging signal about the stability of the UK tax system’’. TheMinister could only promise to check the representations she had received."

DR : could you add your post to the list of those on page 1? IMO a very useful one.

BP
PS Due to my impending benchdom I should have plenty of time to attend the JR!

Could we not just retrospectively alter everything we've done for the last 5 yrs so we arent using that structure.. then resubmit our tax returns and therefore no bills... ??