Loans from EBTs and other Trusts

[Emigre]

HMRC Guidance

HMRC have just published the attached response to questions raised in the consultation period for proposed legislation to address loans from EBTs and other trusts.

http://www.hmrc.gov.uk/budget-update...ation-faqs.pdf

The extent of the relevance of this will depend on the precise nature of your arrangements and through the different planning advisors.

[Emigre]

Request for bank statements

Anyone else had a letter from MontP stating that HMRC have asked for copies of bank statements for 2008 – 2009??

I have no problem providing the information but in this age of identity theft it really irks me that HMRC can demand copies and that nothing should be deleted (i.e. bank account, sort code, etc). Knowing how incompetent HMRC are they’ll simply dump them in the bin once they’re finished with them and before you know it my identity will be ripped off by some criminal and I’ll never be able to travel or work again!!

Hi Fireship. This relates to loans and not BN66 so is best dealt with there. However, yes, I have received the same letter. My instinct is that MontP are wrong with their assertion that items on the statements should not be redacted.

HMRC have launched an enquiry into our SARs and have specifically stated that they are enquiring into the payments throught the partnership and trusts. Therefore, as far as I'm concerned that is all they need to see and at this stage all they are entitled to see. Provision of ones entire bank statements might provide them with an indication of ability to pay the BN66 nonsense for those involved in both.

Personally, I believe HMRC have overstepped the mark by requesting copies of bank statements since once again we have been transparent about all forms of income on our returns. At a technical level a loan does not need to be reported on an SAR, you don't put your new mortgage on there. We have included information regarding the loans once again for transparency, and it seems, once again, that those that are transparent get nailed while those that simply hide everything get away with it.

[redkieran]

When I spoke to MontP about this in January they said I could redact everything other than the loan payments. I've got a joint account so there is no reason why they need to see my wife's banking history!

[Fireship]

Thanks for the feedback - I'll have a word with MontP and send HMRC the details of the relevant transactions only!!

[Emigre]

When I spoke to MontP about this in January they said I could redact everything other than the loan payments. I've got a joint account so there is no reason why they need to see my wife's banking history!

The letter from HMRC clearly stated they were looking at the loan payments. Whilst they asked for the bank statements why would they need to see anything other than the receipt of the loan and of the contract fees, unless of course they are on a fishing trip for more information. Unless they have good grounds for looking elsewhere I'm not convinced that legally they are entitled to the information.

Emigre

[Fireship]

RE: Request for bank statements

So what are most people planning to do, just send details of the relevant transactions?? A simple spreadsheet should suffice if that's the case....

[CanPayButWouldRatherNot]

So what are most people planning to do, just send details of the relevant transactions?? A simple spreadsheet should suffice if that's the case....

maybe montpelier should be setting the record straight and we present a common front to HMRC and we all do the spreadsheet route ... ..

if they really want bank statements .. will scan in and deface any unrelated items (joint bank accounts etc) ...but think we all should do the same and publish this message out to a wider audience

[Emigre]

So what are most people planning to do, just send details of the relevant transactions?? A simple spreadsheet should suffice if that's the case....

HMRC have asked for bank statements. If you have your bank statements a spreadsheet will not suffice. If you decide to destroy your bank statements now, or make them otherwise unavailable, you leave yourself exposed to penalties, probably at the higher levels.

Having spoken with an advisor it does appear that redaction may be a defendable option. The information request is based on enquiry into the loan payments; as such information about where money got spent should not be relevant. There is however one big caveat here...if you have income on your bank statement that for whatever reason, error or otherwise, that you did not declare then to redact those amounts could possibly be construed as a more deliberate act of concealment. So, if you have an interest bearing account, think about the small amounts of interest brfore putting a black marker through them.

If HMRC persist with the need for unredacted statements, given that bank statements are not explicitly listed as statutory documents we may be able to force this issue before the tax commissioners for a decision. MontP have indicated their willingness to pursue that line.

Further, MontP have now agreed not to advise people NOT to redact leaving it up to individual contractor discretion.

Guys. I'm not a lawyer, but once again together we have a better chance.

Hope this helps

Emigre

[Fireship]

HMRC have asked for bank statements. If you have your bank statements a spreadsheet will not suffice. If you decide to destroy your bank statements now, or make them otherwise unavailable, you leave yourself exposed to penalties, probably at the higher levels.

Having spoken with an advisor it does appear that redaction may be a defendable option. The information request is based on enquiry into the loan payments; as such information about where money got spent should not be relevant. There is however one big caveat here...if you have income on your bank statement that for whatever reason, error or otherwise, that you did not declare then to redact those amounts could possibly be construed as a more deliberate act of concealment. So, if you have an interest bearing account, think about the small amounts of interest brfore putting a black marker through them.

If HMRC persist with the need for unredacted statements, given that bank statements are not explicitly listed as statutory documents we may be able to force this issue before the tax commissioners for a decision. MontP have indicated their willingness to pursue that line.

Further, MontP have now agreed not to advise people NOT to redact leaving it up to individual contractor discretion.

Guys. I'm not a lawyer, but once again together we have a better chance.

Hope this helps

Emigre

Thanks Emigre!!

In my case the period requested equates to a 57 pages of joint bank statement so I guess I’ll be putting a black marker through everything except the loan payments and interest earned….

That is of course unless we all decide on a common response, i.e. spreadsheet containing only the relevant information along with a statement pointing out that bank statements are not statutory documents and as such will not be provided in the interest of privacy.

[Emigre]

Thanks Emigre!!

In my case the period requested equates to a 57 pages of joint bank statement so I guess I’ll be putting a black marker through everything except the loan payments and interest earned….

That is of course unless we all decide on a common response, i.e. spreadsheet containing only the relevant information along with a statement pointing out that bank statements are not statutory documents and as such will not be provided in the interest of privacy.

We MUST provide statements. End of. However, on the basis of their request we MAY have an option to redact items not relevant to a tax return. Whether we do or not is at our personal discretion within the parameters that I set out above. However, we must be prepared to take our case to a tax tribunal/commissioners if objected to by HMRC.

They have only asked for information regarding loan payments. Advice suggests not redacting any other of your income, declared or not, in addition to the loan/contract payments that appear on your statements. However, be prepared to have to disclose the full monty if HMRC take it to the commissioners and win their argument. Personally, unless they have other reasons for wanting the information that they are not owning up to, I cannot see why it is worth their while wasting ours and taxpayers time and money to learn which supermarket we all shop at. We do know though, from past experience, how deceitful HMRC can be with their reasoning. On my radar screen they figure below estate agents.

I will be taking this action. Thankfully I don't have 57 pages to blank out.

Emigre