can I contact HMRC to settle
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  1. #31

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    Quote Originally Posted by HebdenMole View Post
    Thank you. I am considering joining Big Group. Don't know if this is a better option than settling directly with HMRC.

    Appreciate any thoughts as I am really all at sea here.
    I cannot be seen as unbiased in terms of joining/not joining BG.

    Have a look at the BG thread and the views there of members.

  2. #32

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    Quote Originally Posted by webberg View Post
    I cannot be seen as unbiased in terms of joining/not joining BG.

    Have a look at the BG thread and the views there of members.
    Thank you.

    I think I am going to engage a tax adviser (prob WTT).

    Worth it for (relative) peace of mind I think.

  3. #33

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    Default WARNING !!!! It is not that simple

    Quote Originally Posted by LadyPenelope View Post
    Honestly think this is a good idea. Peace of mind is worth it if you know you can pay to make it all go away.
    Hi,

    Sadly it is not as simple as contacting HMRC, settling and living happily ever after. HMRC are acting in bad faith so beware!!!!

    I was involved with a loan scheme, contacted HMRC because my provider and trust went quiet for a long time and I got rattled by the threatening HMRC letters. I settled on HMRC's terms . . . . but HMRC are now breaking their own settlement contract and double taxing me on the same (settled PAYE paid) already taxed income (use to be loans).

    In short:
    - HMRC provided me with their excessively over (multiple times!!!) estimates of my loans, even for closed years. (Closed years are included after they get the information for the open years from you.)
    - I provided HMRC with bank statements so they have the correct amounts.
    - HMRC gave me a settlement agreement in which I had the option to INCLUDED the release of my loans as PART OF THE settlement.
    - I asked HMRC (the department dealing with me) if IHT will be charged on my released loans. They did not want to tell me, even when I sent a letter to the IHT department asking them.
    - I notified HMRC that NOBODY could tell me if IHT will be due and that HMRC's IHT department they referred me to, does not respond.

    - HMRC's own settlement agreement state that if I settle/pay, NO FURTHER TAXES will be due. There are a number of other points also on HMRC's settlement agreement that state no IHT is due.

    - I opted to release my loans as part of the settlement, signed and paid the settlement amount.

    - Guess what. The same IHT department that did not want to tell me if IHT will be due on released loans, now sent me a letter stating IHT is due because I released my loans.

    - This IHT department is refusing to acknowledge what is written in HMRC's own settlement agreement, that the release of my loans are included in the settlement, no IHT or further taxes will be due regarding me loans.

    You've been warned, HMRC are acting in bad faith, they are breaking their own settlement contract.

    PS I see a lot of chat about CTDs. Get one. I did and it saved me a lot of money but had to pay a lot in interest for the time before I got the CTD.

    At the moment I do not know what to do next, how can I get this mavia called HMRC to honour their own agreement.

  4. #34
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    Quote Originally Posted by HMRC made Atlas Shrug View Post
    Hi,

    Sadly it is not as simple as contacting HMRC, settling and living happily ever after. HMRC are acting in bad faith so beware!!!!

    I was involved with a loan scheme, contacted HMRC because my provider and trust went quiet for a long time and I got rattled by the threatening HMRC letters. I settled on HMRC's terms . . . . but HMRC are now breaking their own settlement contract and double taxing me on the same (settled PAYE paid) already taxed income (use to be loans).

    In short:
    - HMRC provided me with their excessively over (multiple times!!!) estimates of my loans, even for closed years. (Closed years are included after they get the information for the open years from you.)
    - I provided HMRC with bank statements so they have the correct amounts.
    - HMRC gave me a settlement agreement in which I had the option to INCLUDED the release of my loans as PART OF THE settlement.
    - I asked HMRC (the department dealing with me) if IHT will be charged on my released loans. They did not want to tell me, even when I sent a letter to the IHT department asking them.
    - I notified HMRC that NOBODY could tell me if IHT will be due and that HMRC's IHT department they referred me to, does not respond.

    - HMRC's own settlement agreement state that if I settle/pay, NO FURTHER TAXES will be due. There are a number of other points also on HMRC's settlement agreement that state no IHT is due.

    - I opted to release my loans as part of the settlement, signed and paid the settlement amount.

    - Guess what. The same IHT department that did not want to tell me if IHT will be due on released loans, now sent me a letter stating IHT is due because I released my loans.

    - This IHT department is refusing to acknowledge what is written in HMRC's own settlement agreement, that the release of my loans are included in the settlement, no IHT or further taxes will be due regarding me loans.

    You've been warned, HMRC are acting in bad faith, they are breaking their own settlement contract.

    PS I see a lot of chat about CTDs. Get one. I did and it saved me a lot of money but had to pay a lot in interest for the time before I got the CTD.

    At the moment I do not know what to do next, how can I get this mavia called HMRC to honour their own agreement.
    The main issue with IHT is that even HMRC's IHT office are a bit unsure a) if IHT applies and b) who it applies to. the general consensus is that for the standard EBT, IHT will apply. But, the last time I looked at this (via the Tax Advisory I used to negotiate my settlement), the opinion was that the charge fell on the Trustee (which made life hard for us as the Trust won't write off the loans because they don't want to pay the IHT).

    Its complicated though as it relies on the way the original trust was set-up, so whats true for one EBT, may well be very different for another EBT..

    One thing that confuses me about your case though - HMRC was offering to write off your loans? or offered that as an option?? How did that work? considering that the only person able to do that was the Trustee and HMRC has absolutely no say in that aspect..

  5. #35

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    HMRC in all likelihood did NOT offer to write off the loans. They are not part of the loan agreement and as such have no power to intervene.

    More likely is that HMRC included in the agreement the ASSUMPTION that you would arrange for the loans to be released/written off within perhaps 90 days of the agreement to settle. Failure to do that - i.e. something YOU need to do - will generate potential further liabilities.

    HMRC is acting in bad faith though - I agree.

    They do not promise full and final settlement, but they use weasel words to give that impression.

    The IHT office refuses to accept any analysis except their own, even where that gives a lie to the income tax position.

    HMRC will refuse to confirm that the 2019 charge will not apply.

    HMRC will refuse to say that a subsequent repayment and redistribution of the loan after 2019 will not attract tax.

    Be very careful because a lot of people who thought they had settled will be receiving new demands soon.

  6. #36

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    If you've paid HMRC income tax on the loan amounts, how much extra can the IHT be?

    So using very simple numbers:

    When you joined the EBT you thought you would walk away with 85% of your earnings. So you're only down 15% in terms of fees and some tax.

    Then HMRC come in with a sledge hammer and suddenly you're down another ~40% (assuming tax and NICs) of total earnings. So now you're down a total of 55%.

    And then IHT?

    Sounds like out of the 100% you earned, you won't be left with much more than, what, 20%?

  7. #37

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    Quote Originally Posted by ChimpMaster View Post
    If you've paid HMRC income tax on the loan amounts, how much extra can the IHT be?

    So using very simple numbers:

    When you joined the EBT you thought you would walk away with 85% of your earnings. So you're only down 15% in terms of fees and some tax.

    Then HMRC come in with a sledge hammer and suddenly you're down another ~40% (assuming tax and NICs) of total earnings. So now you're down a total of 55%.

    And then IHT?

    Sounds like out of the 100% you earned, you won't be left with much more than, what, 20%?
    Perhaps facile rather than simple?

  8. #38

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    Quote Originally Posted by ChimpMaster View Post
    If you've paid HMRC income tax on the loan amounts, how much extra can the IHT be?

    So using very simple numbers:

    When you joined the EBT you thought you would walk away with 85% of your earnings. So you're only down 15% in terms of fees and some tax.

    Then HMRC come in with a sledge hammer and suddenly you're down another ~40% (assuming tax and NICs) of total earnings. So now you're down a total of 55%.

    And then IHT?

    Sounds like out of the 100% you earned, you won't be left with much more than, what, 20%?
    No wonder HMRC are so keen for people to keep joining these schemes......

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    Quote Originally Posted by webberg View Post

    HMRC will refuse to confirm that the 2019 charge will not apply.
    .
    The wording of CLSO2 says you can avoid loan charge for closed years with voluntary payment.

    https://www.gov.uk/government/public...ttlement-terms

    "To prevent future DR charges (including the loan charge) arising on loans or other payments made from funds paid into the DR scheme in years which are not protected, contractors must make a voluntary payment. "

    Presumably they *will* confirm that the 2019 charge will not apply if you settle under CLSO2.

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    Quote Originally Posted by starstruck View Post
    The wording of CLSO2 says you can avoid loan charge for closed years with voluntary payment.

    https://www.gov.uk/government/public...ttlement-terms

    "To prevent future DR charges (including the loan charge) arising on loans or other payments made from funds paid into the DR scheme in years which are not protected, contractors must make a voluntary payment. "

    Presumably they *will* confirm that the 2019 charge will not apply if you settle under CLSO2.
    All I would say is be VERY careful with regards to what closure (or lack of it) that any CLSO will give you. I strongly advise you discuss it with a tax professional.

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