Settlement Opportunity

[squirrel]

its what happens afterwards that worries me.

Isn't that the whole point of the current developments. As DR succinctly puts it, HMRC are spreading FUD. They want you to be worried so you settle.

[StrengthInNumbers]

So tell me what happens when the APN is paid ? What happens if there is no FTT case? or the case is lost?

At some point either after an FTT result or when it is not contested will HMRC apply penalties? I know APN's do not have any penalties attached, its what happens afterwards that worries me.

How and why will penalties be applied after FTT? Penalties will happen in following cases:
1) APN not paid on time.
2) FN issued but tax payers still wants to go to court (JR will be interesting if and when HMRC uses this power).
3) you have lied on your self assessment or hiding information from HMRC.
4) not cooperating with HMRC. For this u need an accountant to represent you otherwise u r walking into a minefield.

So this will happen with APN:
1) HMRC issues and taxpayer pays
2) case go to tribunal and decides. If tax payer lost - pay the interest and +/- tax based on decision and matter finish. Remember as with settlement u r agreeing to all what HMRC are saying if anything it will be - adjustment if HMRC lose in any point like IHT.
3) your case don't go to court but some similar case will as we cases are in pipeline. Based on judgement in cases, HMRC Zealand will start to use FNs to conclude the matters.

Above is my understanding but HMRC runs like a headless chicken so who knows.

I will say it again: I would settle if HMRC can give clearly why penalties will apply on paying an APN and go to courts. Until then for me settlement is taking HMRC views as tribunals view and agreeing to worst case. I can see FUD but nothing solid to say paying APN is worst compared to SO. On the other hand with SO taxpayer clearly loses any chance of getting money back once they settle even if HMRC lose.

I will get a same good night sleep after paying an APN as I will get after SO. But I will never have a good night sleep if I settle and tomorrow HMRC lose. Sums involved are big so we all should not be careless. It is 40% earning for every past year open.

[centurian]

How and why will penalties be applied after FTT? Penalties will happen in following cases:
1) APN not paid on time.
2) FN issued but tax payers still wants to go to court (JR will be interesting if and when HMRC uses this power).
3) you have lied on your self assessment or hiding information from HMRC.
4) not cooperating with HMRC. For this u need an accountant to represent you otherwise u r walking into a minefield.

I think you might be understating (3) and (4) very slightly. What HMRC may argue as "hiding" may not be the same interpretation as what you think it is. Also remember that you can get a 30% penalty for just being "careless".

However, I believe both will be hard for HMRC to prove in court, especially if you have all your ducks in a row. But that may not stop them from trying - and I don't think the chances of deflecting penalties can be guaranteed. HMRC are upping the ante - the fact they didn't apply penalties to Boyle doesn't mean they won't try it on now.

It's a risk/reward judgement call. I am not affected, so it's easy to try and make that judgement - but in my opinion, the risk (of extra penalties) is low and rewards (of getting all the money back) is high, so I think my approach would be to agree with StrengthInNumbers, reject the SO and hold out for an APN / FTT

However, I don't believe it's a zero risk approach, so I can understand some who just want to put it behind them.

[MrsB1974]

Whether settle or APNs the money will be same if u agree with HMRC. HMRC ARE NOT AND CANNOT LEGALLY BR GIVING A DISCOUNT OR TAKE A PENALTY OFF BECAUSE U R SETTLING. For interest u have tax deposit certificate.

Sorry, by "reducing the tax bill" I didn't mean a discount or no penalty - I meant that by taking Hector to court to challenge an APN you might get a ruling that (for example) IHT does not apply, therefore you end up paying less than the original APN. So, slighty better outcome.

I wonder what happens with those who settled months ago... will their cases be re-opened an have IHT applied?

Urgh, if it weren't for IHT I would probably settle as I don't want this hanging over my head for years (including the possible recall of the loans - god forbid).

[AlCapone]

I think you might be understating (3) and (4) very slightly. What HMRC may argue as "hiding" may not be the same interpretation as what you think it is. Also remember that you can get a 30% penalty for just being "careless".

However, I believe both will be hard for HMRC to prove in court, especially if you have all your ducks in a row. But that may not stop them from trying - and I don't think the chances of deflecting penalties can be guaranteed. HMRC are upping the ante - the fact they didn't apply penalties to Boyle doesn't mean they won't try it on now.

It's a risk/reward judgement call. I am not affected, so it's easy to try and make that judgement - but in my opinion, the risk (of extra penalties) is low and rewards (of getting all the money back) is high, so I think my approach would be to agree with StrengthInNumbers, reject the SO and hold out for an APN / FTT

However, I don't believe it's a zero risk approach, so I can understand some who just want to put it behind them.

I thought HMRC were bound by a code to treat all tax payers equally. So how could they not apply penalties to Boyle but penalise everyone else?

[LadyPenelope]

Sorry, by "reducing the tax bill" I didn't mean a discount or no penalty - I meant that by taking Hector to court to challenge an APN you might get a ruling that (for example) IHT does not apply, therefore you end up paying less than the original APN. So, slighty better outcome.

I wonder what happens with those who settled months ago... will their cases be re-opened an have IHT applied?

Urgh, if it weren't for IHT I would probably settle as I don't want this hanging over my head for years (including the possible recall of the loans - god forbid).

Hi Mrs B. IHT on transfers out of a trust is charged at 6%: https://www.gov.uk/trusts-and-inheritance-tax - see the para at the bottom of the 4th main header. So it's not as high as IHT on other types of income/assets. In fact on my settlement calc it was about a fifth of the income tax plus interest calc on the loans. I don't really see how they can claim that the money received is income and an asset, but perhaps someone else can enlighten me on this.

We'd all be better off if they just charged us IHT instead of Income Tax. It does seem wrong that they charged both.

Whilst there was a detailed breakdown of Income Tax and interest calculations thereon on my settlement letter, the IHT was just stated as a figure with no indication of a) how it was calculated and b) what the interest was and how they arrived at it. To me this implies that they don't want to lay themselves open to the IHT being questioned as they feel that they are on shakier ground with the IHT.

[DonkeyRhubarb]

Boyle

From what I can tell Boyle didn't put anything on his tax return about the foreign currency transactions or loans.

See first paragraph on Page 39.

http://www.financeandtaxtribunals.go...06/TC03103.pdf

If penalties didn't apply in this case of "blatant non disclosure" then it's hard to see how they could apply to other EBT/loan/currency schemes.

[MrsB1974]

Hi Mrs B. IHT on transfers out of a trust is charged at 6%: https://www.gov.uk/trusts-and-inheritance-tax - see the para at the bottom of the 4th main header. So it's not as high as IHT on other types of income/assets. In fact on my settlement calc it was about a fifth of the income tax plus interest calc on the loans. I don't really see how they can claim that the money received is income and an asset, but perhaps someone else can enlighten me on this.

We'd all be better off if they just charged us IHT instead of Income Tax. It does seem wrong that they charged both.

Whilst there was a detailed breakdown of Income Tax and interest calculations thereon on my settlement letter, the IHT was just stated as a figure with no indication of a) how it was calculated and b) what the interest was and how they arrived at it. To me this implies that they don't want to lay themselves open to the IHT being questioned as they feel that they are on shakier ground with the IHT.

Thanks Lady P - I was calculating IHT @ 40% so it's slight relief to hear from you that it's much lower. Totally agree about the double jeopardy approach of both income tax and IHT. Would be keen to hear from others whether they think FTT would approve such a thing.

What are your current thoughts on settling?

And the fact that Hector has extended the settlement deadline, but that we can't settle until they resolve IHT, does that mean they'll recalculate the interest (currently calculated up to only 9th Jan 2015) to June 2015?

I think I saw you on the ASIOM thread - did you ever get a reply from Saleos? Has anyone managed to get hold of ASIOM / DMS / Cascade (or whatever they're called now) to see whether they plan to support us? (I got a reply from Contractor Helpdesk saying that they couldn't help me as ASIOM didn't engage with them.)

[LadyPenelope]

Thanks Lady P - I was calculating IHT @ 40% so it's slight relief to hear from you that it's much lower. Totally agree about the double jeopardy approach of both income tax and IHT. Would be keen to hear from others whether they think FTT would approve such a thing.

What are your current thoughts on settling?

And the fact that Hector has extended the settlement deadline, but that we can't settle until they resolve IHT, does that mean they'll recalculate the interest (currently calculated up to only 9th Jan 2015) to June 2015?

I think I saw you on the ASIOM thread - did you ever get a reply from Saleos? Has anyone managed to get hold of ASIOM / DMS / Cascade (or whatever they're called now) to see whether they plan to support us? (I got a reply from Contractor Helpdesk saying that they couldn't help me as ASIOM didn't engage with them.)

I've never tried to contact ASMG as I don't have any faith in them as an organisation based on their relative lack of communication during the original HMRC investigations. Based on a post on here (was that the Saleos one?) some while back I was sent a link to a website that purports to give advice, asking me to put all my details in - loans, dates, name and address, all that. I didn't as I was skeptical about gaining access to this 'large body of information', thinking that I might be unwittingly signing up to a paid service. Let's face it, if it was free information, they wouldn't want people's details, would they? Except possibly for security and confidentiality of the information, which could be achieved via different security info anyway. Then, quite recently, I received an email from the same people offering advice for £500. I wouldn't pay for advice as it'd end up being as much as the tax, probably, and also, I don't know who these people are, so what are their qualifications/credentials? Could be another scam and I'm sure we've all had enough of those.

Will you settle, do you think? The fact that they've extended the deadline seems to imply that they know they are on dodgy ground. I'm inclined to think it's best to sit tight until the situation plays out, depending on a person's level of anxiety. It's always possible to buy a certificate of tax deposit which would mitigate the interest. If you don't use the certificate to pay this, it can be used to pay other taxes (Self Assessment etc) or drawn out. Still a horrible situation for us all.

[Boobetty]

If it is any consolation, IHT for many of us is only triggered by loans being written off. Therefore if you do not settle (which, it seems, can trigger the loan write off) IHT does not arise. I believe therefore it is extremely unlikely that IHT will be included in APN's, although it is HMRC's view that it will continue to accrue until, I guess, we die.

It's a great shame for me. I WAS willing to settle. But now with this talk of IHT I can no longer afford to do so. Not to mention that, on principal, I would rather emigrate to Venezuela than be taxed twice.

The sensible option therefore is to pay the APN when it arrives, then wait and see what happens. The Settlement Opportunity was intended to provide closure, but for me personally it appears to have achieved the opposite.