Loans from EBTs and other Trusts

[BlasterBates]

The first sentence above is not correct.

I think your comment is misleading.

I've worked in several countries and generally if you are working their country they expect you to pay tax. Obviously for a few days this probably wouldn't be necessary.

Certainly I would take advice from a local accountant.

[geoff from contracta IOM]

I think your comment is misleading.

I've worked in several countries and generally if you are working their country they expect you to pay tax. Obviously for a few days this probably wouldn't be necessary.

Certainly I would take advice from a local accountant.

From the ROI Citizens Information Service -

Residence for tax purposes

Your residence for tax purposes depends on the number of days that you are present in Ireland during a tax year (A tax year means the period from 1 January to 31 December).

You are resident for tax purposes for a year if:
•You spend 183 days or more in Ireland in that year from 1 January – 31 December or,
•If you spend 280 days or more in Ireland over a period of two consecutive tax years, you will be regarded as resident for the second tax year. For example, if you spend 140 days here in Year 1 and 150 days here in Year 2, you will be resident in Ireland for Year 2.

For tax years up to 2008, each day you are present at midnight counts as one day in the calculation of residency for tax purposes. From tax year 2009 onwards, the midnight rule no longer applies, and you are treated as being present in the State, if you are present in the State at any time during that day.

[BlasterBates]

From the ROI Citizens Information Service -

Residence for tax purposes

Your residence for tax purposes depends on the number of days that you are present in Ireland during a tax year (A tax year means the period from 1 January to 31 December).

You are resident for tax purposes for a year if:
•You spend 183 days or more in Ireland in that year from 1 January – 31 December or,
•If you spend 280 days or more in Ireland over a period of two consecutive tax years, you will be regarded as resident for the second tax year. For example, if you spend 140 days here in Year 1 and 150 days here in Year 2, you will be resident in Ireland for Year 2.

For tax years up to 2008, each day you are present at midnight counts as one day in the calculation of residency for tax purposes. From tax year 2009 onwards, the midnight rule no longer applies, and you are treated as being present in the State, if you are present in the State at any time during that day.

These rules for establishing your personal tax residency are separate from whether Irish sourced income is taxable.

Contractors get into a lot of trouble because they assume if they don't have personal tax residency, whereby all their worldwide income must be taxable, they assume they're not taxable at all.

Not having tax residency does not exempt you from being taxed on sourced income from that country. That needs to be done on a case by case basis. On the whole if you're a contractor and in particular you have a contract with an Irish based company it will be taxable. If your contract is with a UK based co, but you are working on site and you are not personally resident, then indeed you probably won't be liable for tax. However the fact that payment is in Euros indicates to me that the contract is with an Irish based company. The use of intermediaries will generally be viewed critically especially if you are billing through a UK Ltd co of which you are the sole beneficiary.

[Emigre]

Mortgages

I recently applied for an extension to my mortage for some alterations to the house. My existing mortgage is with that place run by Bob Diamond that gets retrospectively taxed because they indulge in tax avoidance - in larger size than anything I'm guilty of...

In spite of having a letter from MontP stating that I had receipts from the trust, they would only accept the income shown on my SA302s (tax calculations). This is a word of warning to anyone thinking of remortgaging. It does also demonstrate how hypocritical the blue eagle is.

[geoff from contracta IOM]

I recently applied for an extension to my mortage for some alterations to the house. My existing mortgage is with that place run by Bob Diamond that gets retrospectively taxed because they indulge in tax avoidance - in larger size than anything I'm guilty of...

In spite of having a letter from MontP stating that I had receipts from the trust, they would only accept the income shown on my SA302s (tax calculations). This is a word of warning to anyone thinking of remortgaging. It does also demonstrate how hypocritical the blue eagle is.

There are other lenders who are happy to work with similar arrangements to ours, PM me if you want details.

[Morlock]

I'm Thinking of Asking HMRC to Issue a Closure Notice

I was on an offshore Loan scheme for a year-and-a-bit following the demise of the Trust scheme, and have had two COP8 enquiries opened for those years. Shortly after the enquiries were opened, HRMC asked for various bits of evidence to check the veracity of the loan arrangements (copy of the loan agreement, proof of monies received, etc) which were duly supplied. I've heard nothing since, and now that HMRC have got all the info they requested, I think they should be in a reasonable position to make a judgement on my tax position. I don't want to wait indefinitely for a retrospective change to the law which will clobber me at some point in the future, so I'm seriously contemplating asking HMRC to issue a closure notice. Has anyone got any advice to offer on this, or had any experience of doing so?

[CanPayButWouldRatherNot]

good point .. we bn66'ers got accused of doing nothing last time ... so put the ball back over to them .. good idea

[Buzby]

I was on an offshore Loan scheme for a year-and-a-bit following the demise of the Trust scheme, and have had two COP8 enquiries opened for those years. Shortly after the enquiries were opened, HRMC asked for various bits of evidence to check the veracity of the loan arrangements (copy of the loan agreement, proof of monies received, etc) which were duly supplied. I've heard nothing since, and now that HMRC have got all the info they requested, I think they should be in a reasonable position to make a judgement on my tax position. I don't want to wait indefinitely for a retrospective change to the law which will clobber me at some point in the future, so I'm seriously contemplating asking HMRC to issue a closure notice. Has anyone got any advice to offer on this, or had any experience of doing so?

I got a self assessment statement in March this year for

"31 jan 08 Amendment to 1st Payment on account for 07/08 following enquiry amendment"
"31 jul 08 Amendment to 1st Payment on account for 07/08 following enquiry amendment"
"31 jan 09 Amendment to 1st Payment on account for 08/09 following enquiry amendment"
"31 jul 09 Amendment to 1st Payment on account for 08/09 following enquiry amendment"

for 07/08 I was in the trust scheme, then for 08/09 I was in the loan scheme. sent this to MP and not heard anything since. but I agree, I would rather get this sorted now rather than have something come along in a few years with large interest.

[dezze]

I got a self assessment statement in March this year for

"31 jan 08 Amendment to 1st Payment on account for 07/08 following enquiry amendment"
"31 jul 08 Amendment to 1st Payment on account for 07/08 following enquiry amendment"
"31 jan 09 Amendment to 1st Payment on account for 08/09 following enquiry amendment"
"31 jul 09 Amendment to 1st Payment on account for 08/09 following enquiry amendment"

for 07/08 I was in the trust scheme, then for 08/09 I was in the loan scheme. sent this to MP and not heard anything since. but I agree, I would rather get this sorted now rather than have something come along in a few years with large interest.

I wouldn't hold your breath...these things drag on for years.

[Emigre]

I got a self assessment statement in March this year for

"31 jan 08 Amendment to 1st Payment on account for 07/08 following enquiry amendment"
"31 jul 08 Amendment to 1st Payment on account for 07/08 following enquiry amendment"
"31 jan 09 Amendment to 1st Payment on account for 08/09 following enquiry amendment"
"31 jul 09 Amendment to 1st Payment on account for 08/09 following enquiry amendment"

for 07/08 I was in the trust scheme, then for 08/09 I was in the loan scheme. sent this to MP and not heard anything since. but I agree, I would rather get this sorted now rather than have something come along in a few years with large interest.

There appears to be far greater awareness in Parliament today regarding retrospection which will help to prevent another BN66 type scenario. However, equally we do not have the same time delays and maladministration that went on to give us any other grounds for defence.

I think this may be one for MP to consider. I would write and ask them. It would take HMRC to consider your loan as income for them to have any real shot at us. However, I tend to agree with you that squeezing them now will prevent them a) giving the Tardis a service and b) dreaming up some groundless legal base to challenge us.