Loans from EBTs and other Trusts

[Alan Jones]

For info and on suggestions received I am posting this on this topic as well as from the BN66 thread...

The records for Contracta Solutions Ltd at the Co's Registry in the IOM show that:-
the Co was incorporated just last month on 24 February,
the two directors who have signed the Statutory form consenting to act are:-

1) Mr Jesse Grant HESTER of Po Box 244, Sunbeach Villa, Royal Road, Grande Baie, Mauritius, a British Consultant and

2) Ms Cis Lieve Lisa OVERSTEYNS a Belgian Consultant of P O Box 500462, Al Nakheel 3B, Apt G02, Street3, The Greens, Dubai, UAE

The Co Secretary is given as Arc Forrest Limited, Unit10, Springates East, Government Road, Charlestown, Nevis, West Indies.

The sole subscriber shareholder is:- Peruvious Limited, Trident Chambers, Road Town, Tortola, BVI

The Registered Office is located at P O Box 227, Clinch's House, Lord Street, Douglas, IM99 1RZ, Isle of Man

The Company has specified "the control and management of the business of the Company shall be in and from the Isle of Man or such other place as the Directors may determine from time to time"

With regards to Accounts "The company elects to exempt itself from the requirement to lay accounts before the company in general meeting, pursuant to Section 2A of the Companies Act 1982"

With regards to Appointment of Auditors:- "The Company may elect to dispense with the audit of its accounts to the extent permitted by Regulations and Companies Acts as shall apply".

Note - the Reg Office is located at the offices of SMP Partners:-
Contact Us : SMP Partners

I leave it to you all to Google and read info on Mr Hester - interesting
Also:-
you can find Jesse Hester on LinkedIn as Owner at Atlas Corporate Services Limited and Atlas at Atlas Corporate Services | Offshore Company Formation

I would be wondering who is really 'calling the shots' on this Company?? Surely not Jesse Hester or his identified co-director..probably some shadow director who is the true beneficial owner??

AGREED - this appears to be common place SO that the REAL Directors/Owners do not get "caught" by the 3rd party debt transfer rules i.e. they want all of the rewards and none of the risks.

I have recently come across another well known IOM scheme where 2 guys introduced themselves as Chief Executive and Finance Director BUT they are NOT listed as Directors of the scheme companies.

PLUS i have a feeling SMP (a substantial firm) are involved in these schemes providing trust services.

[Alan Jones]

I think you're right, and the currency transactions are "virtual".

Also, if one currency fails to plummet then the loan can always be paid off and reissued in a different "basket case".

One advantage of this arrangement is that eventually there will be no outstanding loans.

BUT HMRC do not like this scheme. I know of one schemes under investigation. It issued the loan document in "Drubles" but paid loan in sterling and never bothered to actually undertake the currency transactions to "cut" corners/costs.

[DonkeyRhubarb]

BUT HMRC do not like this scheme. I know of one schemes under investigation. It issued the loan document in "Drubles" but paid loan in sterling and never bothered to actually undertake the currency transactions to "cut" corners/costs.

Let's face it, HMRC detest all retail schemes.

If someone is intent on using a scheme (and personally I'm not convinced it's worth the risk), then there is probably a good argument for spreading the risk rather than putting all your eggs in one basket. At least if you switch arrangements every year or so, there's a chance that some will work out.

One of the reasons BN66 has caused so much distress is that many people were in the scheme for a very long time.

[Waldorf]

Is there any news if the proposals released in december have been changed at all?

I was suspecting that the new scheme suggestions would be closed before they open?

[Alan Jones]

Budget 2011

Is there any news if the proposals released in december have been changed at all?I was suspecting that the new scheme suggestions would be closed before they open?

Disguised Remuneration "DR" - Draft legislation was issued on 9 December 2010. This legislation will be amended to reflect "slight/miscellaneous" changes BUT we will not see these changes until 31 March when the Finance Bill is published. HOWEVER, the documents that were issued yesterday indicate that DR is still only targetting "employee" and therefore not "sole traders/self employed"

BUT

there is a throwaway sentence in a document published yesterday that states:
“In addition to the work outlined above, specific changes included in Finance Bill 2011 will address a long-standing area of risk where payments though intermediary arrangements have been used to avoid PAYE and National Insurance Contributions (NICs)." (Extract from Tackling Tax Avoidance published 23 March)

This is a very vague statement. We will not know until the Finance Bill is published on 31 March 2011 whether it will attack/stop any of the current IR35 schemes being promoted i.e scheme may pass the DR law BUT fail some other provision to be announced.

PLUS it is very unusual to make such a vague statement without any indication of how they are going to "address" it. In the past Govt/Treasury/HMRC have made statements and released draft legislation at the same time.

[DonkeyRhubarb]

Longer term, the proposed "cash flow" measure outlined in that "Tackling Tax Avoidance" paper could be a bigger problem for all these schemes.

If people had to pay the tax/nic upfront, and then try and get it back, it would be a huge disincentive.

[Alan Jones]

Agree 100%

Longer term, the proposed "cash flow" measure outlined in that "Tackling Tax Avoidance" paper could be a bigger problem for all these schemes.

If people had to pay the tax/nic upfront, and then try and get it back, it would be a huge disincentive.

Agree - this looks like a "pincer/sphincter" movement or as Tom Sharpe once wrote all orifices were attacked with equal vigour.

[geoff from contracta IOM]

AGREED - this appears to be common place SO that the REAL Directors/Owners do not get "caught" by the 3rd party debt transfer rules i.e. they want all of the rewards and none of the risks.

I have recently come across another well known IOM scheme where 2 guys introduced themselves as Chief Executive and Finance Director BUT they are NOT listed as Directors of the scheme companies.

PLUS i have a feeling SMP (a substantial firm) are involved in these schemes providing trust services.

As is so often the case Alan you are wrong

[Alan Jones]

As is so often the case Alan you are wrong

Ok lets meet for coffee so that you can tell me why i am wrong.

[Vallah]

You're next door to C'est La Vie aren't you Alan, go on push the boat out and make it half a lager.