• Visitors can check out the Forum FAQ by clicking this link. You have to register before you can post: click the REGISTER link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below. View our Forum Privacy Policy.

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

Collapse
X
  •  
  • Filter
  • Time
  • Show
Clear All
new posts

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

    If you know of any other ways, post them and I'll add to this list.

    1. Don't have any income in 2018/19
    Take the year off work.
    If you've got a Ltd Co, don't draw any salary or divis, and take a Director's loan to live off.

    2. Max out pension contributions in 2018/19
    You can use up any unused allowance for the prior 3 years, 2015/16, 2016/17, 2017/18
    Carry forward

    3. Invest in EIS, SEIS and/or VCT in 2018/19
    https://www.kingstonsmith.co.uk/wp-c...IS+and+VCT.pdf
    Last edited by cojak; 30 December 2017, 13:00. Reason: Updated title to reflect uncertainty of these solutions

    #2
    Isn't the tax due against the years the loans were made?

    Will this stop IHT?

    Comment


      #3
      Originally posted by BrilloPad View Post
      Isn't the tax due against the years the loans were made?
      The "loan charge" is due against tax year 2019-2020. It's, allegedly, a "new charge" on a "new loan".

      Of course, the "loan charge" is primarily a big gun pointed at the head of contractors to "convince" them to "settle" on HMRC's wonderful "CLSO 2" terms (complete with "voluntary payments" for closed years, etc).
      Help preserve the right to be a contractor in the UK

      Comment


        #4
        Originally posted by DotasScandal View Post
        The "loan charge" is due against tax year 2019-2020. It's, allegedly, a "new charge" on a "new loan".

        Of course, the "loan charge" is primarily a big gun pointed at the head of contractors to "convince" them to "settle" on HMRC's wonderful "CLSO 2" terms (complete with "voluntary payments" for closed years, etc).
        I thought it was 2018/19

        Comment


          #5
          Originally posted by starstruck View Post
          I thought it was 2018/19



          Correct, any loans which have not been repaid and for which tax has not already been paid will be treated as income received on 5th April 2019 (within the 18-19 tax year). And tax will have to be paid by January 31st 2020...



          See https://www.enterprisetax.co.uk/2019-loan-charge/
          Last edited by eek; 18 December 2017, 15:44. Reason: got the date
          merely at clientco for the entertainment

          Comment


            #6
            Correct for 2018/19.

            Correct for HMRC not giving up on earlier years.

            Debatable for pensions contributions being deductible against the DR charge.

            If no earned income in 2018/19, then no pension contribution relief.
            Best Forum Adviser & Forum Personality of the Year 2018.

            (No, me neither).

            Comment


              #7
              Originally posted by webberg View Post
              If no earned income in 2018/19, then no pension contribution relief.
              What about the previous 3 years?

              Comment


                #8
                Originally posted by Loan Ranger View Post
                What about the previous 3 years?
                I don't know. I'll have to go and look.
                Best Forum Adviser & Forum Personality of the Year 2018.

                (No, me neither).

                Comment


                  #9
                  You can only carry forward previous years if you max out pension contributions in current year.

                  Comment


                    #10
                    Originally posted by jbeer View Post
                    You can only carry forward previous years if you max out pension contributions in current year.


                    So because you have no income in 2018/19 and cannot claim pension relief in 2018/19 you will not be able to use the allowances of previous years.


                    As I stated in the other thread that pointed here these plans don't work.....
                    merely at clientco for the entertainment

                    Comment

                    Working...
                    X