No To Retro Tax – Campaign Against Section 58 Finance Act 2008

[flamel]

Im very serious, CGT is payable upon you making a GAIN, i.e. profiting from sale of an asset. IF the GAIN goes to the crown, then do you technically make a gain? Forget about the scheme for a moment, if you owe a tax debt but have to sell an asset that would normally incur a CGT liability if you are the benefactor then fine, bit if the crown is the benefactor do the same rules apply?

Its an open question I would like an answer too, Im not saying it is the case, so please dont start judging or assuming Im trying to pull a fast one, I would like an INFORMED answer. Go and troll somewhere else....

Get yourself a specialist tax advisor! There's a booming industry now with this latest legislation fiasco in the pipeline.

[Old Greg]

Im very serious, CGT is payable upon you making a GAIN, i.e. profiting from sale of an asset. IF the GAIN goes to the crown, then do you technically make a gain? Forget about the scheme for a moment, if you owe a tax debt but have to sell an asset that would normally incur a CGT liability if you are the benefactor then fine, bit if the crown is the benefactor do the same rules apply?

Its an open question I would like an answer too, Im not saying it is the case, so please dont start judging or assuming Im trying to pull a fast one, I would like an INFORMED answer. Go and troll somewhere else....

A straight answer:

You buy a (not main residence property) for £100,000.
You sell it for £200,000.

You have made a £100,000 capital gain and CGT is payable (subject to allowances etc.)

Separately from that, you have an outstanding debt to HMRC and you use the proceeds of the sale post-tax to pay the debt. The gain is seen because the debt has gone away, just as if you were paying any other debt (e.g. a mortgage debt). Why would it be any different?

[smalldog]

A straight answer:

You buy a (not main residence property) for £100,000.
You sell it for £200,000.

You have made a £100,000 capital gain and CGT is payable (subject to allowances etc.)

Separately from that, you have an outstanding debt to HMRC and you use the proceeds of the sale post-tax to pay the debt. The gain is seen because the debt has gone away, just as if you were paying any other debt (e.g. a mortgage debt). Why would it be any different?

because my question is if HMRC are the CGT liability and tax debt creditor does one negate the other. Whereas in your example the mortgage company are the creditor not HMRC. And yes of course there is legal advice to be sought on this, just wondered if anyone already had received advice. Im not making the case for nor against, it just makes a HUGE difference to me personally if HMRC will declare CGT not due as the crown is receiving all proceeds.

[AtW]

Firstly avoidance isn’t evasion, even HMRC haven’t sunk to your standards.

Read what I said - in a fascist country what you did would be 100% classed as tax evasion and at BEST those who did it would end up in jail with long sentences (10 years plus), organisers would probably get shot to make example of them. That's the kind of things that one could EXPECT from a fascist country.

That's why I said be grateful you don't live in one.

[jamesbrown]

A straight answer:

You buy a (not main residence property) for £100,000.
You sell it for £200,000.

You have made a £100,000 capital gain and CGT is payable (subject to allowances etc.)

Separately from that, you have an outstanding debt to HMRC and you use the proceeds of the sale post-tax to pay the debt. The gain is seen because the debt has gone away, just as if you were paying any other debt (e.g. a mortgage debt). Why would it be any different?

This will be the reality. As others have pointed out, there may be workarounds, such as selling your current PPR and moving into the new house as your new PPR, but this would probably involve skating on the sort of thin ice that produced the original problem - worth taking professional advice though.

[AtW]

Im very serious, CGT is payable upon you making a GAIN, i.e. profiting from sale of an asset. IF the GAIN goes to the crown, then do you technically make a gain?

If your argument was correct then it would make it possible to pay off HMRC tax liability using your gross salary and then trying to argue that no income/NIC due on that gross amount paid.

I am not a tax lawyer but I doubt very much such argument would succeed because debts are paid AFTER you get the money - liabilities appears from getting those money in the first place don't magically disappear, unless some law says so (ie - like in the past it was possible to pay mortgage from your gross salary).

I'd certainly recommend getting qualified tax person because it's entirely possible there are some laws that will make exception to the rules - given how much at stake it certainly seems worth doing it.

[Fireship]

Im very serious, CGT is payable upon you making a GAIN, i.e. profiting from sale of an asset. IF the GAIN goes to the crown, then do you technically make a gain? Forget about the scheme for a moment, if you owe a tax debt but have to sell an asset that would normally incur a CGT liability if you are the benefactor then fine, bit if the crown is the benefactor do the same rules apply?

Its an open question I would like an answer too, Im not saying it is the case, so please dont start judging or assuming Im trying to pull a fast one, I would like an INFORMED answer. I was intending to get professional advice but cant be the only one in this position that used the scheme, so wondered if someone else had already got an opinion. So please.....Go and troll somewhere else....

Have the general forum trolls got nothing better to do?? No newbies to patronise or explain how a one man Ltd company is a legitimate vehicle that doesnt purely exist to avoid paying full tax!!?? haha

Hi SD,

I’m no expert but I believe you are classed as a benefactor as you’re offsetting the gain against a liability and as such CGT is due.

Definitely speak to an expert and look at the possibility of flipping the property, time permitting of course.

[AtW]

"Caught out tax avoider". Struggling to know the difference between evasion and avoidance?

Paying into a pension? Then you are avoiding tax.
Do you have an ISA? Then you are avoiding tax.

My apologies, I should have used correct qualification - "caught out aggressive tax avoider".

Happy now?

[smalldog]

Hi SD,

I’m no expert but I believe you are classed as a benefactor as you’re offsetting the gain against a liability and as such CGT is due.

Definitely speak to an expert and look at the possibility of flipping the property, time permitting of course.

ok, after all that and spoke to a tax expert and they told me that regardless of what the proceeds are used for, CGT would be due. bugger but worth asking! might be the difference between selling it and letting them just take it! But hey you never know there maybe a deal to be done....

[Old Greg]

ok, after all that and spoke to a tax expert and they told me that regardless of what the proceeds are used for, CGT would be due. bugger but worth asking! might be the difference between selling it and letting them just take it! But hey you never know there maybe a deal to be done....

Can you legitimately make it your primary residence first?