Horizon exit opportunity (Non-Big Group discussion thread)

[me206et]

This forum like 10,000 others is about sharing information and collaboration on the subject of interest.

It remains highly unfortunate that this is deliberately suffocated by a handful of members. No one is asking for free advise, but share what you know and what you found out. If you have nothing to say on topic, its best to say nothing.

Just imagine on other discussions here like "Accounting / Legal", every question was directed to one or more accounting firms telling people off for wanting free advice.

Please share what you know about the new Trustee's proposal.

If you are a member of the scheme then talk to either the new trustees or Go Outsourcing. They should be able to explain, and if everyone is to be believed then it should not be discussed on here. I for one would then, as I said before, like a straw poll on who thinks this is a good idea and who does not. No details required.

[FakeHorizon]

This forum like 10,000 others is about sharing information and collaboration on the subject of interest.

It remains highly unfortunate that this is deliberately suffocated by a handful of members. No one is asking for free advise, but share what you know and what you found out. If you have nothing to say on topic, its best to say nothing.

Just imagine on other discussions here like "Accounting / Legal", every question was directed to one or more accounting firms telling people off for wanting free advice.

Please share what you know about the new Trustee's proposal.

I am impacted by the Horizon 'new trustee' escapade, and have generally had a positive experience when dealing with the trust in Bulgaria, who will happily take your money, less so with the accountancy firm promoting the new 'solution'. My experience so far is they are not to be trusted, the accountancy firm, that is. It really saddens me that after the last few years, there are still those out there looking to take advantage.

[luxCon]

The gift that keeps on giving

As it stands I see the current communication by Go Resourcing as another means to fleece the scheme members while they can. The want 5% + 2.5% admin and interest charges to pay off the loan. However they fail to address ;

1- 2019 is not law yet and details are not clear (Can someone here please expand or correct me)

2 - They keep quoting Ranger v Murray , HMRC court case. Was the outcome of that case not that the tax and NI liability is due on the Employer, and not the Employee? I read on some accounting commentary page that potentially the Trustee may be liable and in some cases may be able to pass on to the members.

Dont the members have a potential case to deny liabilities based on this very case? (Again can someone please clarify)

3 - They do not make it clear how exactly the loan repayment is funded. Is it just transfer of the loan from Trustees to another entity via bridging loan, or is the member supposed to come up with the loan cash value and see the same cash amount paid in to another trust or say the partner's pension pot?

If its the first, then the member would become liable for a perpetual loan with a new entity that potentially could be called up on at any time in future

If the later then I dont have cash anywhere near that amount owed.

4 - The loan value on the Trustees book is actually a tiny amount due to the currency exchanges performed and the losses.

I know 2019 proposal looks to charges on the original GBP value, however the trustee only holds a fraction of that on their books and notional accounts. The trustee should offer the member to pay off the notional amount and write off the loan prior to 2019. Any reason why they can not do that? Should the trustee by law not offer the best option to its member?

Is there a way to force and demand the Trustee to accept the current book value of the loan and pay it off now?

The new scheme & the Trustees have connections to the same individuals who ran the old schemes. AT 7.5% of say average 100k loan value for say 3000 members this is a gift that keeps on giving.

[me206et]

Horizon exit opportunity (Non-BG discussion thread)

I am not sure why the other thread on this was closed.

But I am still interested in what others who were in this scheme think of the options.

I understand some of the ideas, though as said before I am a little concerned with the possibilities that this just opens another can of worms.

I believe the loans will be paid off, by a bridging loan, this then cleared by the trust. I am not sure what then get declared to HRMC, if anything?

[cojak]

I closed it because webberg's thread turned into a thread slagging off webberg.

I have copied posts that belonged in a separate thread, since some object to Big Group.

I will not allow people to post here just to tell you to join BG.

And I will not expect others to slag those people in other threads who do suggest this.

[FakeHorizon]

I am not sure why the other thread on this was closed.

But I am still interested in what others who were in this scheme think of the options.

I understand some of the ideas, though as said before I am a little concerned with the possibilities that this just opens another can of worms.

I believe the loans will be paid off, by a bridging loan, this then cleared by the trust. I am not sure what then get declared to HRMC, if anything?

From what I can see, a commercial loan between two companies will clear off the loans, so no comeback from HMRC on the individual? If you have closed years, I'd certainly think it's worth the gamble, as this 'opportunity' will only be available until the budget. For open years, it's less clear-cut as HMRC won't be doing anything until after the budget, where they have requests for these years to be closed as the loans have been paid back. Heads they win, tails we lose.

[FakeHorizon]

3 - They do not make it clear how exactly the loan repayment is funded. Is it just transfer of the loan from Trustees to another entity via bridging loan, or is the member supposed to come up with the loan cash value and see the same cash amount paid in to another trust or say the partner's pension pot?

If its the first, then the member would become liable for a perpetual loan with a new entity that potentially could be called up on at any time in future

If the later then I dont have cash anywhere near that amount owed.

The transaction would be between two commercial entities, so shouldn't give rise to any further liability on the individual with the (contractor) loan. All you'd have to come up with is 7.5% of the total loan amount? Probably worth it for closed years, for open years, who knows as HMRC will not deal with these until after the budget. For the other point re trustees only holding nominal amounts, they have quite happily reinstated the full sterling value as they make more money that way.

[eek]

From what I can see, a commercial loan between two companies will clear off the loans, so no comeback from HMRC on the individual? If you have closed years, I'd certainly think it's worth the gamble, as this 'opportunity' will only be available until the budget. For open years, it's less clear-cut as HMRC won't be doing anything until after the budget, where they have requests for these years to be closed as the loans have been paid back. Heads they win, tails we lose.

I can see a few flaws in the initial sentence but don't know enough about the scheme in detail to know whether the flaws are real or not.

And that is the problem with all these schemes - they are pulling tricks based on details and the devil is very much in the exact detail of the scheme and whether it was implemented exactly as described (assuming it even worked in the first place).

That is why you need specialist advice and it is why that specialist advice is going to cost. Its also why I would recommend being very careful here as its possibly you could create a situation where you don't just have 1 tax bill to pay from the original scheme but instead end up with 2 - one for the original scheme and another one for the scheme that supposedly "fixed" the first one.

However I will add one final warning here. Tax Schemes are games for the very wealthy to play who can spend the £100,000 in professional advice and gambling £2m in fines to avoid a £5m bill. The professional charges required to get sensible advice here are not ones anyone here will be able to pay (as Webberg stated yesterday a tax advisor will charge £400+ an hour and need a few hours before being able to give you advice) which is why you need advice on a group basis - its also why you need to make your own decisions and not listen to the advice of non-specialists - which includes, ironically, me...

[Iliketax]

As it stands I see the current communication by Go Resourcing as another means to fleece the scheme members while they can. The want 5% + 2.5% admin and interest charges to pay off the loan. However they fail to address ;

1- 2019 is not law yet and details are not clear (Can someone here please expand or correct me)

Yes, that's right. But the Finance Bill was published last Friday and the April 2019 loan charge wording is almost identical to the March 2017 version. HMRC have tightened it up a little to prevent attempts to side step it. So I would say that it will happen (although another general election may delay it a bit) and that the details are clear. They've also published some more legislation in draft this morning that will tightening up the reporting of loans. I assume you were an employee when all this happened. If not, the self-employed rules are a bit different.

2 - They keep quoting Ranger v Murray , HMRC court case. Was the outcome of that case not that the tax and NI liability is due on the Employer, and not the Employee? I read on some accounting commentary page that potentially the Trustee may be liable and in some cases may be able to pass on to the members.

If you have a loan that's not been settled with HMRC then you have two separate but linked issues:

a. HMRC may still chase you for the tax, NIC and interest on open years.

b. The April 2019 loan tax charge will apply.

But if you pay (or someone pays) tax under one you do not have to pay tax under other. This is already law. The trustee is very unlikely to be liable for PAYE/NIC for a number of reasons. But the key to not paying tax under the April 2019 rules is that the tax must already have been paid.

Dont the members have a potential case to deny liabilities based on this very case? (Again can someone please clarify)

The April 2019 loan charge is entirely separate from what anyone thinks Murray Group may or may not mean.

3 - They do not make it clear how exactly the loan repayment is funded. Is it just transfer of the loan from Trustees to another entity via bridging loan, or is the member supposed to come up with the loan cash value and see the same cash amount paid in to another trust or say the partner's pension pot?

No idea. But if you don't genuinely repay the loan then it is still treated as being outstanding. If you get a bridging loan then that might be another charge to tax under the disguised remuneration rules. You'd be foolish to do this without understanding what is actially happening. Especially as there are substantial penalties for carelessly reporting stuff to HMRC.

If its the first, then the member would become liable for a perpetual loan with a new entity that potentially could be called up on at any time in future

If the later then I dont have cash anywhere near that amount owed.

That obviously makes a big difference personally. But if you have a 'perpetual' loan you have a 2019 tax charge (or whenever the new loan is made). If it goes into your partner's pension pot then there can be a whole heap of issues (legislation changed a while ago to prevent an individual getting tax relief on money paid to a spouse's pension). Same if it goes into another trust.

Don't forget to think about the general anti-abuse rule that now comes with a mandatory 60% penalty.

4 - The loan value on the Trustees book is actually a tiny amount due to the currency exchanges performed and the losses.

I know 2019 proposal looks to charges on the original GBP value, however the trustee only holds a fraction of that on their books and notional accounts. The trustee should offer the member to pay off the notional amount and write off the loan prior to 2019. Any reason why they can not do that? Should the trustee by law not offer the best option to its member?

Is there a way to force and demand the Trustee to accept the current book value of the loan and pay it off now?

This is a commercial issue but what does your loan agreement say? You might just be able to pay it off under the procedure in the agreement.

Don't forget that you (i.e. you personally) will have to make a substantial amount of disclosure under the proposed changes to the April 2019 loan rules, including what repayments you have actually made.

The new scheme & the Trustees have connections to the same individuals who ran the old schemes. AT 7.5% of say average 100k loan value for say 3000 members this is a gift that keeps on giving.

At the end of the day, I don't know enough about what they are proposing to do. But on the assumption that you think that, if you ignored tax completely, the outcome will be good / indifferent / not too bad for you commerically (e.g. you will just pay 7.5% fees) then I think that it is almost certain (e.g. 99.99999999999999999% certain) that you'll still end up having to pay a lot of tax when HMRC come knocking (and with a good chance of 60% GAAR penalties).

[luxCon]

Thanks

Thanks for the new thread,
And thanks to those who have already commented and remain interested.

Has anyone from Horizon and Co. schemes tried to repay the loan in its current currency and notional amount?

I did receive a communication from the old trustees that some members had asked to do so, but the trustee had no currency transfer banking facilities and that is why they are transferring it to another trustee.

However reading the original Loan Agreement, it does say the loan

"Each loan shall be repaid in pull upon receipt of our first written demand and in any event on or before the fifth anniversary of the last drawdown or fifth anniversary of this agreement"

In my case the last both were prior to 2010.

Under the Trust Law, could I not demand that the loan is repaid in its current notional value post currency exchange deals that made it smaller?