Horizon exit opportunity (Non-Big Group discussion thread)

[me206et]

Being very naive, if the loan is paid off will it be reported to HRMC in 2019.
Are they saying that every single loan ever made since 1999 has to be declared and if paid off, how and how much and when it was repaid?
Is it just EBT loans contractors loans etc.?

Hey do you think they will go after equity release loans next!!

[eek]

Hey do you think they will go after equity release loans next!!

It's stupid comments like that one that doesn't help things.

The 2019 tax rules are part of the current finance act published last week. Read that to find the actual details....

[cojak]

Hey do you think they will go after equity release loans next!!

I would imagine that they will now...

[Iliketax]

Being very naive, if the loan is paid off will it be reported to HRMC in 2019.
Are they saying that every single loan ever made since 1999 has to be declared and if paid off, how and how much and when it was repaid?
Is it just EBT loans contractors loans etc.?

Close, but not quite. There are something like seven circumstances for loans when lots of stuff lots need to be reported (including name, phone number, email address, name of the scheme, NI No, UTR, whether there's been a settlement, etc) including:

- the initial principal amount of the loan,
- the amount that has become principal under the loan, otherwise than by capitalisation of interest, in each relevant tax year,
- the amount of principal under the loan repaid in each relevant tax year, ignoring any repayments not in money made on or after 17 March 2016,
- the details of any repayment that is to be disregarded (because it's not been repaid in money)
- the amount of principal under the loan that has been released or written off in each relevant tax year,

And a "relevant tax year" means (a) the tax year in which the loan was made, and (b) each subsequent tax year.

One of the seven circumstances is when the loan (or quasi-loan) is still outstanding on 5 April 2019. I've not time to study it properly, but it looks like another one is where the loan was oustanding on 16 March 2016.

[FakeHorizon]

I can see a few flaws in the initial sentence but don't know enough about the scheme in detail to know whether the flaws are real or not.

And that is the problem with all these schemes - they are pulling tricks based on details and the devil is very much in the exact detail of the scheme and whether it was implemented exactly as described (assuming it even worked in the first place).

That is why you need specialist advice and it is why that specialist advice is going to cost. Its also why I would recommend being very careful here as its possibly you could create a situation where you don't just have 1 tax bill to pay from the original scheme but instead end up with 2 - one for the original scheme and another one for the scheme that supposedly "fixed" the first one.

However I will add one final warning here. Tax Schemes are games for the very wealthy to play who can spend the £100,000 in professional advice and gambling £2m in fines to avoid a £5m bill. The professional charges required to get sensible advice here are not ones anyone here will be able to pay (as Webberg stated yesterday a tax advisor will charge £400+ an hour and need a few hours before being able to give you advice) which is why you need advice on a group basis - its also why you need to make your own decisions and not listen to the advice of non-specialists - which includes, ironically, me...

There is an accountancy firm running this new operation with the trustee, so I have paid for their 'advice', which has been chronic and largely inaccurate. As it's the accountancy firm which came up with the various proposals, there is obviously a bit of self-interest in convincing everyone with relevant loans that these proposals are water-tight and there will be no comeback. But I'm not going to pay another firm to comment on the proposals as none of them really know what's going to unfold in the next couple of years.

[FakeHorizon]

Being very naive, if the loan is paid off will it be reported to HRMC in 2019.
Are they saying that every single loan ever made since 1999 has to be declared and if paid off, how and how much and when it was repaid?
Is it just EBT loans contractors loans etc.?

Hey do you think they will go after equity release loans next!!

HMRC will only receive details of loans which haven't been paid off by 2019, which to me is the driver for clearing loans in closed years. Where HMRC already know about a particular year and there is an enquiry, it's unclear whether they will accept what the accountancy firm in question are saying i.e. repay the loan and the enquiry closes.

[Iliketax]

HMRC will only receive details of loans which haven't been paid off by 2019

That's not right. If the draft legislation published today comes in then you will have to give details of loans repaid on or after 16 March 2016.

[FakeHorizon]

That's not right. If the draft legislation published today comes in then you will have to give details of loans repaid on or after 16 March 2016.

But the trust won't supply them as a matter of course, is what I'm getting at. Although that is irrelevant if we have to provide details ourselves. Again, paid-for advice proving to be spectacularly useless and only given to convince people to pay off the loans.

[Iliketax]

But the trust won't supply them as a matter of course, is what I'm getting at. Although that is irrelevant if we have to provide details ourselves. Again, paid-for advice proving to be spectacularly useless and only given to convince people to pay off the loans.

You have to supply the information to HMRC yourself. If you don't, it's a £300 penalty, which can then increase to £60 per day for not doing it. If you supply inaccurate info, there's another £3,000. HMRC will create a "digital tool" for you to supply the information.

To be fair to whoever you paid, this only came out yesterday morning and is still in draft.

HMRC has also been quite clever about this in that (i) if they know of the scheme already then they put a tick on their list of schemes, (ii) if one person reports a new scheme then they add that to the list and can try to find out who else has participated.

[me206et]

You have to supply the information to HMRC yourself. If you don't, it's a £300 penalty, which can then increase to £60 per day for not doing it. If you supply inaccurate info, there's another £3,000. HMRC will create a "digital tool" for you to supply the information.

To be fair to whoever you paid, this only came out yesterday morning and is still in draft.

HMRC has also been quite clever about this in that (i) if they know of the scheme already then they put a tick on their list of schemes, (ii) if one person reports a new scheme then they add that to the list and can try to find out who else has participated.

That's all very well. But how long are you supposed to keep records. I might have some info re loans in 2000/2002 but not complete figures, and not all schemes?