(Possibly) 100% legit ways of mitigating the loan charge

[Loan Ranger]

Isn't the loan charge treated as earned income in 2018/19? After all, it is assessed as PAYE and includes NICs.

[eek]

Isn't the loan charge treated as earned income in 2018/19? After all, it is assessed as PAYE and includes NICs.

May I suggest you go and get some specialist advice rather than ignoring the warnings 3 different people on here are telling you. Personally I wouldn't want to play tricks with HMRC using my pension as I would quite like HMRC to not have any legal rights to go near said pension.

[webberg]

May I suggest you go and get some specialist advice rather than ignoring the warnings 3 different people on here are telling you. Personally I wouldn't want to play tricks with HMRC using my pension as I would quite like HMRC to not have any legal rights to go near said pension.

I think I would agree with the above.

I've gone away and had a look and to be honest, I don't know the answer.

Certainly unused pension relief can be brought forward and used in a later year.

Certainly you can use pension contributions to relieve earned income.

What I don't know is whether the DR charge is treated as earned income. I have the point about it being a PAYE liability but that rests (initially) on the employer and the definition therefore cannot be indicative of there being earned income of the employee.

On the other hand the charge is treating loans as income and employment income at that and that is usually earned income.

So - I don't know.

I'm going to ask a few people who might.

[Loan Ranger]

I'm going to ask a few people who might.

Thank you.

I may be wrong but I don't think my option (3) investing in EIS, SEIS or VCT has the same restriction of it having to be earned income to qualify for relief.

[eek]

Thank you.

I may be wrong but I don't think my option (3) investing in EIS, SEIS or VCT has the same restriction of it having to be earned income to qualify for relief.

So we are now down to thinking (hoping?) rather than 100% sure. Don’t you think you should change the thread title?

[Loan Ranger]

So we are now down to thinking (hoping?) rather than 100% sure. Don’t you think you should change the thread title?

I'll remove any options from the opening post if they are ineffective.

[eek]

I'll remove any options from the opening post if they are ineffective.

May I suggest you update your opening post to reflect the fact they are just your ideas and may (read will) not work. I mean even the pension solution won't work if your income goes above £210,000 once the loans are taken into account.

[stonehenge]

I'll remove any options from the opening post if they are ineffective.

Mate, I'd be careful who you listen to on these forums.

There's a lot of posting motivated by schadenfreude.

[eek]

Mate, I'd be careful who you listen to on these forums.

There's a lot of posting motivated by schadenfreude.

Equally there are people on here who know that in a panic people may join another scheme or plan which may result in what was an already significant issue becoming significantly worse than it already may be.


That's why the mods won't allow people to discuss some "solutions" to schemes and why I'm unhappy with a post that claims to offer 100% legit solutions that seem to be based more on straw clutching than actual advice..

[stonehenge]

I mean even the pension solution won't work if your income goes above £210,000 once the loans are taken into account.

Wrong!

If you go over £210k, you can still contribute £10k in the current year, and it doesn't affect carry forward.

https://www.youinvest.co.uk/sites/de...ward_guide.pdf

Stop spreading FUD.