BIG GROUP

[webberg]

There are perhaps two sets of "rules" that you need to think about here.

One is contained in the links you've been given. These are what I would call "catch up" rules that have been designed to work with the DR charge and other changes to legislation that we have seen in the last two years. As with all such attempts, the definition is inevitably skewed towards achieving the result the anti avoidance legislation wants and in some areas at least, the connection to real world situations is sometimes thin.

So by all means read them and where the rules are specific then they should be applied but bear in mind that they may not always be exactly on point.

The second set is rather more intuitive. HMRC has argued for many years that the loans are not really loans because - mainly - they were never meant to be repaid.

This is a line that has been pushed in enquiries and which was a key part of Rangers and and earlier case called Boyle. In essence they were trying to show that despite documents claiming otherwise, the payments were not loans. In both the above cases this argument largely succeeded although for slightly different reasons.

Whilst we now see legislation that seeks to reverse the consequences of the payments not being loans (at least at the first event when they might have become taxable) the key point is that in many instances the facts that lead to payments having more of a characteristic of earnings than a loan are strong at that a Judge is likely to find that there was not a loan on the occasion of payment.

Clearly at that point, the distinction between "commercial" or otherwise is moot.

I suppose we could describe these as a "hard" test and a "soft" test.

It will be interesting to see where these tests evolve, especially in the latest crop of schemes in the market which use loans but they are loans from employers - i.e. no third party and therefore, the argument goes, no disguised renumeration and therefore no Part 7A with its definitions.

Here we might be looking at the definitions in what might be called the "benefit in kind" rules which are different from both the Part 7A rules and the guidance from the Courts.

The BIK rules say that a loan granted by an employer might mean you have a tax benefit from interest "saved". That is easy to avoid. However, repayment or write off is still required at some point in the future (probably after the employer/promoter/lender has disappeared) and certainly write off is a taxable event in which the borrower can easily and legally be required to pay the tax.

Beware such schemes.

[Iliketax]

What would you say are the "commercial tests" that HMRC use?

Finance (No. 2) Act 2017

but you need to look at: http://www.legislation.gov.uk/ukpga/...aph/19/enacted and the following paragraphs to understand it properly

or

http://www.legislation.gov.uk/ukpga/...aph/25/enacted

[Delendog]

What would you say are the "commercial tests" that HMRC use?

Re-payable in a time period with interest at a commercial rate. Evidence of actual repayments being made.

[WalterWhite]

Calculator ETA, perhaps 3 weeks. This will be for BG members only and will not be released here.

It will not consider differences between loan types. In the 100+ schemes we have seen, none of them, in our opinion, meet the "commercial" tests.

You will NOT be able to exclude some schemes from CLSO. That is an all or nothing process.

Consequently, going for CLSO means that you do not need BG's plan.

You will need to choose between them.

What would you say are the "commercial tests" that HMRC use?

[webberg]

I’d be really interested in seeing this. Do you have an idea of availability date please?
Surely the situation not only depends on the person (both their fanancial situation and/or appetite for a fight) but also based on the scheme used I.e. trust based scheme or commercial loan etc). I have a mixture of arrangements and may take to choose some through BG and some through CLSO? Is this possible?

Keen to have a telephone chat webberg. Have requested a chat through my WTT advisor.

Calculator ETA, perhaps 3 weeks. This will be for BG members only and will not be released here.

It will not consider differences between loan types. In the 100+ schemes we have seen, none of them, in our opinion, meet the "commercial" tests.

You will NOT be able to exclude some schemes from CLSO. That is an all or nothing process.

Consequently, going for CLSO means that you do not need BG's plan.

You will need to choose between them.

[Finalwhistle]

We're working on a calculator now.

I’d be really interested in seeing this. Do you have an idea of availability date please?
Surely the situation not only depends on the person (both their fanancial situation and/or appetite for a fight) but also based on the scheme used I.e. trust based scheme or commercial loan etc). I have a mixture of arrangements and may take to choose some through BG and some through CLSO? Is this possible?

Keen to have a telephone chat webberg. Have requested a chat through my WTT advisor.

[cojak]

I have allowed this debate to continue.

I am with DaveB, Malvolio and Fred Bloggs - talk to webberg over the phone, ask the questions and make your own decisions.

Don't expect webberg, or Phil or any other tax advisor to blab what they plan to do on a public forum.

[webberg]

It’s this really a constructive and worthwhile use of time?

Defending the character of BG and its members?

yes I think so.

[Clairol]

It’s this really a constructive and worthwhile use of time?

[starstruck]

I have to say that the majority of our members are not in the situation you think they are and on their behalf you'll forgive me for considering your comments more than a little patronising.

Some of our members undoubtedly are not financially able to settle at this time.

Some are but choose not to for a variety of reasons.

Percentages in each group? I don't know but I'd be surprised if the first group was a majority.

I said “sympathise with those that can't make this choice ”. I never said nor meant to imply that all big group members are in this camp. And for what it’s worth I was being sincere.