Montpelier & Newquay 10% loan repayment demands

[TAF4]

It is becoming increasingly obvious that the Rathowan 'loans' should be written off ASAP.
3 reasons:
1. If forgiven they MAY be taxable but equally may be classified as a beneficial windfall.
2. If not forgiven then Hector will undoubtedly put them beyond doubt as remuneration at some point in the future. That will cost interest and NIC as well as the tax.
3. If not forgiven WG will continue to perceive his 'loan book' as an asset and attempt to leverage it, whilst Hector will also class it as remuneration too (2 above). Rock + Hard place.

Every option carries risk but option 1 is the lowest risk of the three and the lowest cost exposure.

Thanks LR for bringing this to wider attention.

[BrilloPad]

I have heard that if the loans are forgiven they are not taxable.

[Fireship]

I have heard that if the loans are forgiven they are not taxable.

Correct, such a legal opinion exists, in fact I believe there are similar opinions from other barristers (unrelated to MP) which state the same. However, one much first be able to demonstrate any loans are legitimate for that to be the case - one could also argue that (where any doubt exists) outstanding loans should be legitimised before HMRC use the their time machine to remove the ability to do so.....

[TAF4]

However, one much first be able to demonstrate any loans are legitimate for that to be the case - one could also argue that (where any doubt exists) outstanding loans should be legitimised before HMRC use the their time machine to remove the ability to do so.....

Is there doubt about the 'legitimacy' of the loans? If so how can they be legitimised?
Confused.

[sid84763]

It is becoming increasingly obvious that the Rathowan 'loans' should be written off ASAP.
3 reasons:
1. If forgiven they MAY be taxable but equally may be classified as a beneficial windfall.
2. If not forgiven then Hector will undoubtedly put them beyond doubt as remuneration at some point in the future. That will cost interest and NIC as well as the tax.
3. If not forgiven WG will continue to perceive his 'loan book' as an asset and attempt to leverage it, whilst Hector will also class it as remuneration too (2 above). Rock + Hard place.

Every option carries risk but option 1 is the lowest risk of the three and the lowest cost exposure.

Thanks LR for bringing this to wider attention.

Apologies, are you saying MP should write off the loans so that negates the 10% payment request?

[Fireship]

Is there doubt about the 'legitimacy' of the loans? If so how can they be legitimised?
Confused.

HMRC are certainly questioning the 'legitimacy' of the loans hence the open enquiries. Their argument is that they were never intended to be repaid (despite the loan agreement making provisions for repayment) hence were never real 'loans'.

I'm not going to speculate what certain promoters may be thinking/doing (certainly not on any public forum) but I would suggest the only way for any write down to work would be to first put the status of the loan beyond doubt otherwise doing so achieves nothing as HMRC's position won't change.

[RunningMan]

I have signed a very real loan agreement. I am also facing a very real and substantial loan repayment demand.


So yes, that loan is damn legitimate. Would HMRC please take note of that?

[TAF4]

Apologies, are you saying MP should write off the loans so that negates the 10% payment request?

Damn right I am!

I will then take my chances with Hector and argue that the write off was a windfall benefit.

[BrilloPad]

I have signed a very real loan agreement. I am also facing a very real and substantial loan repayment demand.


So yes, that loan is damn legitimate. Would HMRC please take note of that?

One can hope HMRC will do the right thing.

I am not sure if the loans should be written off or not. After 6 years has passed without contact they cannot be claimed upon.

[webberg]

I have signed a very real loan agreement. I am also facing a very real and substantial loan repayment demand.


So yes, that loan is damn legitimate. Would HMRC please take note of that?

HMRC in the Murray case, accepted that the loans were legitimate. However it mattered not (in their argument) because the liability (in that case the employer's liability) arose when the employer allocated funds to you and that was BEFORE those funds went back to the trust to be loaned to you. Spot the obvious errors there and the somersaults of logic involved.

HMRC in the Boyle case argued that the loans were never made and therefore were not legitimate. They were right. However, despite their using that case as justification for their view - utter nonsense - in that case the loans were meant to be in a foreign currency and that currency was never acquired.