BN66 - Court of Appeal and beyond

[pastalista]

Quick question:

Our house is in joint ownership and I’d like to protect it against bankruptcy should the worse happen (though I’ve no idea how I’ll continue to pay the mortgage with no job or future!!). I understand that HMRC can only come after my half however that in itself would involve a forced sale in order to release my half of the equity.

Any ideas how I would go about transferring it into my wife’s name in such a away that HMRC couldn’t touch it?? I understand that simply transferring assets isn’t possible as HMRC can still come after them as the transfer occurred during a period where a perceived debt was under dispute and as such would be regarded as attempting to falsely reduce ones net worth…. However could my wife legally buy me out at current market value?? That way the house would be hers and HMRC would then target the proceeds of the sale rather than the house??

I’m not intending to find myself in such a position but it’s better to research all options now in order to be prepared! If I lose everything including the shirt off my back then I’d rather it be in a way I have some control over and leaves my children in familiar surroundings to sleep at night.

Hi.

First, can I say how very sorry I am that the judgement went this way. I have been through the mill with HMRC and the courts over EBT schemes and I now how stressful and unpleasant it all is. I really hope you appeal and the decision goes the right way.

In terms of your question, the courts, HMRC and the Insolvency Service all take a very dim view of any attempt to "make yourself poorer" once you know that a debt is due. Now, at this stage, you don't yet know that for sure because there may well be another appeal but if the eventual judgement went against you and you had taken such action then it would be dimly viewed and if it got as far as court they could reverse the financial arrangement that had caused you to be "poorer" (in terms of the available funds to chase).

I echo the response from the other person that answered. You need professional advice on what you can and cannot do before you take any action. The lawyer who helped me was great and although he is a tax specialist, he may well be able to advise on the asset front (or consult the appropriate partner in his firm if he cannot). If you contact me privately I will give you his information.

On the subject of a "forced sale" - would you not be able to remortgage to release your half of the equity rather than sell your family home?

I know that this is very delicate but if you want advice and information about bankruptcy, particularly in respect of the family home, feel free to ask privately (I had to go bankrupt).

Again, my sympathies are with you all.

Regards

Pasatalista

[gasha11]

Unfortunately, I wouldn't feel quite so comfortable if I were you. OECD Article 27 'Assistance in the collection of taxes' means that HMRC can ask a foreign government to collect taxes from a UK citizen who owes taxes and has moved abroad. Not sure if Switzerland has an agreement with the UK on this. Not all countries do. You'd have to check. Most EU countries do and common wealth countries, AFAIK.

HMRC tentacles go everywhere

Hmm. Might need to look in to this...thanks for the heads up...

[Fireship]

I am not a solicitor, but I think your wife could buy you out for the true market value of your share.

If you sold your share to her for less than market value, it would be deemed a "transaction at under value" and then she could be bankrupted too in order to get her share.

Again, as someone said, get proper legal advice.

Thanks Santa, my thoughts exactly!! Will definately be seeking proper legal advice!

[Fireship]

Hi.

First, can I say how very sorry I am that the judgement went this way. I have been through the mill with HMRC and the courts over EBT schemes and I now how stressful and unpleasant it all is. I really hope you appeal and the decision goes the right way.

In terms of your question, the courts, HMRC and the Insolvency Service all take a very dim view of any attempt to "make yourself poorer" once you know that a debt is due. Now, at this stage, you don't yet know that for sure because there may well be another appeal but if the eventual judgement went against you and you had taken such action then it would be dimly viewed and if it got as far as court they could reverse the financial arrangement that had caused you to be "poorer" (in terms of the available funds to chase).

I echo the response from the other person that answered. You need professional advice on what you can and cannot do before you take any action. The lawyer who helped me was great and although he is a tax specialist, he may well be able to advise on the asset front (or consult the appropriate partner in his firm if he cannot). If you contact me privately I will give you his information.

On the subject of a "forced sale" - would you not be able to remortgage to release your half of the equity rather than sell your family home?

I know that this is very delicate but if you want advice and information about bankruptcy, particularly in respect of the family home, feel free to ask privately (I had to go bankrupt).

Again, my sympathies are with you all.

Regards

Pasatalista

Hi Pasatalista,

Thanks for taking the time to reply. I’m definitely intending to seek professional advice but was just wondering if anyone had already been down this road and had any initial thoughts.

To be clear I’m not looking to make myself poorer as the courts would quite rightly take a very dim view. Instead I’m looking for an option that allows me to release my assets for market value cash to then be set aside for HMRC should the worse happen, that way HMRC would get exactly the same amount without my children losing their home!

As for remortgaging to release my half of the equity, I’m guessing at that point the HMRC liability will be a registered debt (which in my case is more than the house is worth) hence access to further lending will be impossible as it’ll fall down at the credit check.

I’ll do some more digging, it may well be that I’d be better off financially if it turns out a court is unlikely to allow bankruptcy based on the fact that young children would be affected as a result. I understand that’s not uncommon.

[johnnyguitar]

[QUOTE=Fireship;1366904]...
As for remortgaging to release my half of the equity, I’m guessing at that point the HMRC liability will be a registered debt (which in my case is more than the house is worth) hence access to further lending will be impossible as it’ll fall down at the credit check.
...QUOTE]

mmm - good point. I may well have to re-mortgage to meet the demand. perhaps it's better to do so now and tuck the money aside.
I used to have an option for 'extending' my mortgage up to a certain amount, within the existing agreement. I must check that out to see if it's still available - in which case, I'll take the money and just keep it in the account (its an offset mortage) - so it wouldn't cost me to lay my hands on the cash right now.

[PlaneSailing]

HMRC Manual

I'm off speaking to my MP this week and
I am going to raise a few points with him.

One point I'm thinking of raising is around
the notice of an HMRC investigation being
used as a sign that retrospection is possible.
The CoA judgement seems to imply this.

I seem to remember from way back that
the HMRC manual said that any mention
of a scheme automatically triggered an
investigation. Did I just imagine this? I think
DR may have posted a link.

[Buzby]

MP

I'm off speaking to my MP this week and
I am going to raise a few points with him.

One point I'm thinking of raising is around
the notice of an HMRC investigation being
used as a sign that retrospection is possible.
The CoA judgement seems to imply this.

I seem to remember from way back that
the HMRC manual said that any mention
of a scheme automatically triggered an
investigation. Did I just imagine this? I think
DR may have posted a link.

what about parliament being misled when the finance bill went through - rather than waiting for the current case could your MP suggest if anything could be done now?

[reckless]

Ombudsman

I agree, it was mentioned earlier this year that Ombudsman might be worth contacting.

http://forums.contractoruk.com/accou...ml#post1260217

could this be done now, since at the moment it isn't in appeal, and I think it would be good to get someone to look at it on grounds other than HR?

This might well be worth exploring, especially since Jane Kennedy's 'clarification' has now been described by the LJs as an 'amendment'. Big difference there I would have thought?

[PlaneSailing]

This might well be worth exploring, especially since Jane Kennedy's 'clarification' has now been described by the LJs as an 'amendment'. Big difference there I would have thought?

The ombudsman requires that I complain to
HMRC first. And I'm sure they will give us the
' not whilst it's under appeal' line. However
in such an unusual case , there may be room
for manoeuvre. No harm in asking.

[ONO]

De-Briefing Letter

I received a letter today from Montpelier through the post - a debriefing following the CoA - anyone else receive this?

Yep same letter was waiting for me when I got home.

Nothing exciting or unexpected in it.