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Overdrawn Capital Account Scheme (Aston Mae / Glen Mae / Procorre)

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  • Iliketax
    replied
    Originally posted by Telco7676 View Post
    2. the acquisition sell from procorre is using the entrepreneur relief introduced in 2015 so the valuation would be subject to 10% CGT and they claim this will clear the overdrawn balances and future profit shares.
    CGT may (or may not) be due at ER rates. And self-employed DR may be due at income tax / NIC rates. Fortunately, the self-employed DR rules have a provision to stop double tax. But the net result of that would be income tax / NIC rates as they are higher than CGT rates. So, if you do want to do this make sure you take your own personal advice on the self-employed DR rules from someone who is competent to advise on them and is independent. Oh, and you should also get them to advise you on the close companies' gateway as it may be that the new owners get your company to do a "relevant transaction" after you've sold it. And ask about GAAR while you are at it.

    Leave a comment:


  • Telco7676
    replied
    Overdrawn Capital Account Scheme (Aston Mae / Glen Mae / Procorre)

    1. agree that any crediting of overdrawn account will result in income tax via profit share to partner.
    2. the acquisition sell from procorre is using the entrepreneur relief introduced in 2015 so the valuation would be subject to 10% CGT and they claim this will clear the overdrawn balances and future profit shares.

    Has anyone gone down this route?

    Leave a comment:


  • Telco7676
    replied
    Overdrawn Capital accounts. profit shares and Loan Charge 2019

    1. Agree that any crediting of overdrawn account will result in a tax liability to the contractor, just like the profit share for 2012 that was declared by Glen May in Oct 2016

    2. The Procorre acquisition route is to use the HMRC entrepreneur relief that was introduced in 2015 - pay 10% CGT on the acquisition value and clear the overdrawn account and end the prospect of any future profit shares.

    Has anyone gone down this route yet?

    https://www.gov.uk/government/public...eneurs-relief-

    Leave a comment:


  • Telco7676
    replied
    Originally posted by TroyT View Post
    Hmmm, not too sure about that one. I’m pretty sure they are an overseas registered company, not UK.
    Don’t think they would need to do anything with regards to Companies House.
    I’ve had communication with them at the end of Jan this year.

    Don't think they can dissolve a company that has partners owing money to it (overdrawn capital account balances) unless administrators have concluded that they can't get the money back

    Leave a comment:


  • Iliketax
    replied
    Originally posted by Telco7676 View Post
    My understanding is that LLP's using the overdrawn capital account scheme are now under pressure to clear these balances down and the only real option left is for them to declare profit shares or apply costs against it, ie an acquisition cost of a LTD company from the contractor

    Questions I have and somebody here may have the answers is:

    1. Does the 2019 loan charge scheme also loop in overdrawn capital account balances?
    2. Has Glen May LLP been dissolved and if so does this mean no further profit shares will be issued? They applied one in 2016 for 2012 accounting year but never heard of one since.
    3. Is anyone on here gone down the acquisition route with Procorre? If so would be good to hear your thoughts.
    My first issue is with your comment "the only real option left is". The sentence may read better if you change "real" to "imaginary".

    Are there really any profit shares to allocate now? If the LLP did allocate accounting profits (e.g. by crediting an overdrawn capital account), why is that not within the self-employed disguised remuneration rules now? In other words, doing that might create a tax / NIC charge today (we can argue the subtleties of the comparator for "Condition E", but that probably won't help and you'd have to think about the TAAR too).

    Similarly, if your limited company is bought from you for a credit to your LLP capital account, how does that stop the current self-employed DR rules applying? Again, you need to consider the TAAR and that the "relevant benefit amount" is not reduced by any consideration you give (i.e. your shares in your limited company).

    Either way is the outstanding capital account really repaid with "money"? If not, you'd end up paying tax twice. Once on the new credit to your capital account now, once on the original amount on 5 April 2019.

    You'd also want to think about various other bits and pieces (like GAAR). This has a 60% penalty. Whether this could apply will depend on the facts and I have no idea what they are.

    Leave a comment:


  • webberg
    replied
    Originally posted by Telco7676 View Post
    Just been reading into this thread.

    I was with Aston Mae, Glen May and now Proccore.

    My understanding is that LLP's using the overdrawn capital account scheme are now under pressure to clear these balances down and the only real option left is for them to declare profit shares or apply costs against it, ie an acquisition cost of a LTD company from the contractor.

    Questions I have and somebody here may have the answers is:

    1. Does the 2019 loan charge scheme also loop in overdrawn capital account balances?
    2. Has Glen May LLP been dissolved and if so does this mean no further profit shares will be issued? They applied one in 2016 for 2012 accounting year but never heard of one since.
    3. Is anyone on here gone down the acquisition route with Procorre? If so would be good to hear your thoughts.

    Thanks
    1. The charge covers "any form of credit". I think therefore that it would be hard to argue that an ability to overdraw an account would not be a form of credit.

    2. The Glen May "profit share" is, in my opinion, a paper exercise that is designed to achieve nothing other than protection for those behind Glen May.

    3. Deducting the cost of acquiring a Ltd Co as a trading expense? Not a chance. The Procorre structure you should take to a competent adviser and ask some hard questions of.

    Leave a comment:


  • Telco7676
    replied
    Overdrawn Capital accounts. profit shares and Loan Charge 2019

    Just been reading into this thread.

    I was with Aston Mae, Glen May and now Proccore.

    My understanding is that LLP's using the overdrawn capital account scheme are now under pressure to clear these balances down and the only real option left is for them to declare profit shares or apply costs against it, ie an acquisition cost of a LTD company from the contractor.

    Questions I have and somebody here may have the answers is:

    1. Does the 2019 loan charge scheme also loop in overdrawn capital account balances?
    2. Has Glen May LLP been dissolved and if so does this mean no further profit shares will be issued? They applied one in 2016 for 2012 accounting year but never heard of one since.
    3. Is anyone on here gone down the acquisition route with Procorre? If so would be good to hear your thoughts.

    Thanks

    Leave a comment:


  • webberg
    replied
    Can I ask why and how you think you are obliged to make an amendment to the 12/13 profit?

    Leave a comment:


  • TroyT
    replied
    Still going I think

    Originally posted by David991 View Post
    As far as I know Glen May was dissolved around the end of last year, and deregistered at Companies House. It appears to be the pattern that Procorre and its other guises follow. Close one company run by them and open a new one. At the very least it means you can’t find information on them on the internet.
    Hmmm, not too sure about that one. I’m pretty sure they are an overseas registered company, not UK.
    Don’t think they would need to do anything with regards to Companies House.
    I’ve had communication with them at the end of Jan this year.

    Leave a comment:


  • David991
    replied
    Originally posted by TroyT View Post
    Has anyone had their 2012/13 Profit Share Figure from Glen May yet?
    Time is running out to get it this tax year - as promised.

    Been trying to get a response from them for a few weeks now - NOTHING !!!

    Not very reassuring. Not happy, especially since I’m making “payments on account” based on receiving this figure annually.

    Come on Glen May, get onto this.
    As far as I know Glen May was dissolved around the end of last year, and deregistered at Companies House. It appears to be the pattern that Procorre and its other guises follow. Close one company run by them and open a new one. At the very least it means you can’t find information on them on the internet.

    Leave a comment:

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