The stuff you need to know about loan schemes......

[Waldorf]

For any one who's interested - the new Tax Avoidance Schemes (information) Regulations 2012 http://www.legislation.gov.uk/uksi/2...0121836_en.pdf Coming into effect next month

Translation please!

[speling bee]

Translation please!

Breeze is zero risk.

[porrker]

Breeze is zero risk.

I'm not sure how you can state that. HMRC will come after the users of the scheme stating that the commercial loans are disguised income and you will get taxed appropriately.

The insurance that they use will not payout because the scheme will be deemed to be okay by HMRC.

Remember HMRC have said they will not go after the schemes but the users.....

This is most certainly not risk free.

[Taita]

I'm not aware of any insurance companies that specialise in unanticipated tax liability, but you can insure almost anything with some companies/brokers (HowStuffWorks "9 Odd Things Insured by Lloyds of London"). Bespoke insurance will cost more than mass-marketed insurance because the costs of working out the risk for one case is going to be higher than for many, but it may still be affordable for you?

Legal expenses insurance is widely available - although not all policies cover tax investigations.

Always bearing in mind that you cannot insure yourself against you committing an illegal act!

[LisaContractorUmbrella]

Translation please!

Basically - "we have re-written the rules so cough up"

[Waldorf]

Judging by all the noise in the press etc, I am expecting some harsh measures on tax avoidance in the autumn statement next month. Osborne will have an easy goal to score if he attacks these schemes, so he would be mad to not go for it, especially as the other economic news is not so good at the moment.

[a Man of Constant Sorrow]

HMRC raise the bar

Imminent legislation or not, HMRC have commenced their assault proper on EBT schemes both past and present - for example all previous users of the Sanzar scheme (100's) have received letters (myself included) re loans and how they were settled; These have been referred to their tax accountants, who's default letter appears somewhat lacking confidence.

Garraway (Formally Sanzar) are now also under investigation I am hearing, amongst others in that tight nit group - never previously have they gone after so many at once. I believe this will set precedence for all such schemes clearly subject to outcome. End game type stuff

QC approved/100% compliant is not worth the paper written on.

Back to LTD I think for me

[ibnul]

Imminent legislation or not, HMRC have commenced their assault proper on EBT schemes both past and present - for example all previous users of the Sanzar scheme (100's) have received letters (myself included) re loans and how they were settled; These have been referred to their tax accountants, who's default letter appears somewhat lacking confidence.

Garraway (Formally Sanzar) are now also under investigation I am hearing, amongst others in that tight nit group - never previously have they gone after so many at once. I believe this will set precedence for all such schemes clearly subject to outcome. End game type stuff

QC approved/100% compliant is not worth the paper written on.

Back to LTD I think for me

Hi ,
I got similar letter from HMRC as I have used Sanzar as well, but I had a feeling this is coming, and moved out of them by 2nd of 2010. Now HMRC is asking some response, and I have two options, will wait for your advise:
letteer says: we know you had a loan from Sanzar
1:
can you say if you have repaid it and dates. I think the moment I said it is repaid, that loan become taxable, is this good ?
2:
or shall I say no it is not paid, and it is a benefit of kink, I "forget" to mention it in my 2011 April tax return, and pay whatever they come up with.

Thinking time I guess, option one or two, will settle this time, and thank God I moved to UK company , as I dont think it is worth it the hassle.
thanks

[a Man of Constant Sorrow]

Would suggest sending the letter you recieved to Garraway who will then refer you to their tax accountants/lawers dealing with this case, who I'm informed will deal with HMRC re defending the scheme on behalf of those who received the letter.

Prior to proceeding with either of the two actions you have suggested, the above would be a sensible first step.

[PhilBreeze]

For properly administered EBTs, any loans from the EBT before 9th December 2010 should remain untaxable. The recent decision of the Tribunal in the Rangers appeal supports this view.

If you continued to receive loans from the EBT after 9th December 2010 they may be taxable under the legislation which was brought in to tax EBT payments. However this legislation does not have any effect prior to 9th December 2010.

As previously stated with any such correspondence from HMRC you should take professional advice, if possible from the provider of the scheme you were in at the time. Even if the loans are not in principle taxable, answering HMRC's letter inaccurately could cost you a lot in time and effort.