BN66 - Time to fight back (Chapter 3)

[BrilloPad]

Latest I have from de graaf

they expect JR to be in about a year - not feb........
they are supporting MP rather than separate JR as this (they say) would unnecessarily clog up and delay the legal process
remain confident we will win



so what to do - have to say i am tempted to pay my 07 / 08 amount and hope to get it back............. any thoughts on this

I understand interest is payable at 4.5% - seems I can get 5% in a savings account so after tax it is fairly close. Any idea what the penalties etc might be?

speaking to a Financial Adviser friend last night. Don't want to poo on the parade, but he said they were promoting a tax avoidance scheme a few years back. When it came to the courts, HMRC won because they had more money to spend on big cheese lawyers.......

Interesting news : many thanks. montp alone have millions of fees riding on this (early scheme members paid 6% then another 4% on winning). they have earned tens of millions from this scheme alone. and they have other schemes and their reputation. if it comes to who has the deepest pocket then I am 99% confident of winning.

[Toocan]

HMRC knew that the BN66/DTA Scheme would come along

It wasn't unexpected when Montpelier and others started using the DTA for tax planning - HMRC knew it would be used. They could have closed it down - if they wanted to.

Here is a clipping from HMRC's website:
link is http://www.hmrc.gov.uk/manuals/ithma...39_ITH1660.htm

The legislation is written in terms of United Kingdom residents who are partners but some tax planners have already suggested that it may be possible to develop the Padmore principle to apply to other situations where there are primary and secondary taxpayers for example where there is a trading trust with non-resident trustees and the profits pass to a United Kingdom resident life tenant. These further refinements will be kept under review. It has also been suggested that the legislation has not succeeded in overriding the treaties. Any claim to exemption connected either with a new scheme or the effect of subsection (4) should be referred to International Division (Double Taxation).

That is something close to acceptance that the "loop hole" works.

This might be something worthy of mention in your next letter to your MP.

[onyx]

First CN Received

I received my first CN yesterday. I am expecting 3 in total. It came to about 39% of trust income plus interest on top. In total, I'm expecting a 6 figure sum after interest. I'll be sending off to MP both by post and email (i.e. document scan).

I've got a CTD to cover a third of the liability and the rest would need to come from future earnings or disposal of assets. However, that is a moot point since I intend to fight all the way rather than handing over the hard earned. Once this is over, all being well, I'll be making a generous donation to worthwhile causes.

Keep the faith and keep fighting the battle with honour!

[BrilloPad]

I received my first CN yesterday. I am expecting 3 in total. It came to about 39% of trust income plus interest on top. In total, I'm expecting a 6 figure sum after interest. I'll be sending off to MP both by post and email (i.e. document scan).

I've got a CTD to cover a third of the liability and the rest would need to come from future earnings or disposal of assets. However, that is a moot point since I intend to fight all the way rather than handing over the hard earned. Once this is over, all being well, I'll be making a generous donation to worthwhile causes.

Keep the faith and keep fighting the battle with honour!

[seadog]

It wasn't unexpected when Montpelier and others started using the DTA for tax planning - HMRC knew it would be used. They could have closed it down - if they wanted to.

Here is a clipping from HMRC's website:
link is http://www.hmrc.gov.uk/manuals/ithma...39_ITH1660.htm



That is something close to acceptance that the "loop hole" works.

This might be something worthy of mention in your next letter to your MP.

Toucan,well done for posting thsi extract on the forum.

I entirely agree with you, if HMRC knew of the potential loophole following the Padmore case it surely dosn't take 21 years for "These further refinements will be kept under review" before taking steps to "clarify" the legislation.

I cannot help feeling that with this and all the other information which this forum has unearthed any tax barrister worth his fee has enough evidence to win this JR. Trying to be objective the case agaist HMRC seems overwhelming.

[BrilloPad]

I have been swapping emails with a tax accountant I was introduced to. Got a very interesting one today. Basically confirmed that HMRC are bully boys and "will go for anyone and anything, sometimes regardless of the cost to set an example and to send a frightening message to others."

Also emphasized who much they are using silks and putting money into investigation teams. And how important the paper trail is! Its very important we are careful what we say and pass everything through montp : make sure i are dotted and t crossed.

BP

[DonkeyRhubarb]

R T F M

It wasn't unexpected when Montpelier and others started using the DTA for tax planning - HMRC knew it would be used. They could have closed it down - if they wanted to.

Here is a clipping from HMRC's website:
link is http://www.hmrc.gov.uk/manuals/ithma...39_ITH1660.htm



That is something close to acceptance that the "loop hole" works.

This might be something worthy of mention in your next letter to your MP.

Good detective work Toocan.

John Whiting from PwC mentioned this in a reply to an email I sent him last May.

I should have mentioned that one of the points we have raised with HMRC is that planning technique has been known to them for some time and has even been referred to in their manual....so why do they suddenly need to clamp down in this way? We await a response on that one!

The CIOT also raised this in their letter to Jane Kennedy.

http://www.tax.org.uk/showarticle.pl?id=7249

Taxpayers have had no warning of this apparent need for clarification. Quite the reverse: the HMRC manual has referred to the sort of planning now being attacked since 1997. Whatever the rights and wrongs of the avoidance device, taxpayers and advisers could surely be forgiven for assuming its use was accepted – or, at any rate, not seen as warranting tackling with any urgency. In particular, there was never any indication of a need to change – or clarify – the 1987 law.

Jane Kennedy's response was typically evasive.

Finally, you suggested that references in HMRC manuals to this scheme meant people could assume the scheme was accepted. HMRC guidance merely noted that some tax planners had suggested that this was possible but this in no way provides any acceptance of the scheme. HMRC did not accept this view of the law and that remains the case.

Whichever way you look at it though, what's printed in their manual is a bit at odds with their response to the JR proceedings.

HMRC had made both the general public and professional market well aware of its view in 1987 that “partner” and “member of a firm” included any person entitled to a share of the profits of a partnership. HMRC say that this obviously includes a life tenant of a trust where the trustee is a partner.

[smalldog]

I have been swapping emails with a tax accountant I was introduced to. Got a very interesting one today. Basically confirmed that HMRC are bully boys and "will go for anyone and anything, sometimes regardless of the cost to set an example and to send a frightening message to others."
Also emphasized who much they are using silks and putting money into investigation teams. And how important the paper trail is! Its very important we are careful what we say and pass everything through montp : make sure i are dotted and t crossed.

BP

And as with any other type of bully in my eyes this makes them look thick, stupid and without rationale, doesnt scare me. Not scared of stupid people, its the clever ones ya gotta look out for.

[xantamisch]

Certificate of Tax Deposit

I am sure it is on here - I have looked at the link on the front page - but can someone explain (in 4 year old language!) how the CTD scheme works? thanks

[bombaycat]

And as with any other type of bully in my eyes this makes them look thick, stupid and without rationale, doesnt scare me. Not scared of stupid people, its the clever ones ya gotta look out for.

Without wishing to come across as a paranoid schizophrenic eek in my experience, the worst deeds done to me have almost always been done by people masquerading as close friends, not that I have trust issues or anything....bullying is definitely a sign of weakness and desperation, if they knew they were right they could calmly step back, take their time and cleanly bring about justice - hardly the way I'd describe their endless harassing letters with no actual substance or logic.