Sympathy for the Devil

[phil@pmtc]

Hi Phil,

Thanks for the detailed reply.

Would you say as a ballpark estimated amount the settlement will be approx 35-40% of the total loans? so for e.g. 500k loan would be between £175 to £200k?

If I first try to settle with HMRC myself but if I then find the amount is a lot higher than I expected e.g £250K and payment term is too short e.g 3 years then could I then use your services to check the calculations and negotiate a longer payment term or will it be too late then as I have already engaged with the HMRC?

Thanks

As long as you haven't signed the settlement forms and handed them back to HMRC then an advisor can still assist at any stage.

40% prob not million mile off but obv will depend on individual circumstances (allowances/interest etc).

[phil@pmtc]

As long as you haven't signed the settlement forms and handed them back to HMRC then an advisor can still assist at any stage.

40% prob not million mile off but obv will depend on individual circumstances (allowances/interest etc).

Sorry, should add, can still discuss a time to pay at any point even after the forms handed back in but id suggest is good idea to start that discussion as soon as poss once total figure agreed.

[badchi]

Sorry, should add, can still discuss a time to pay at any point even after the forms handed back in but id suggest is good idea to start that discussion as soon as poss once total figure agreed.

Thanks Phil for the advice I will contact at your web site for a quote.

[Clairol]

HMRC Negotiation

If approx 1200 people want to negotiatie with HMRC are the chances of getting a better settlement than CLS02 improved?

[webberg]

If approx 1200 people want to negotiatie with HMRC are the chances of getting a better settlement than CLS02 improved?

I would say almost none.

HMRC is offering an extra statutory position and any attempt to move away from that usually results in a "take it or leave it" scenario.

Phil's note above is fine so far as tax goes but you also have to deal with the loan, DR charge, possible trust distributions etc. I'm sure he can do all of that but you would be sensible to get a fee quote for all the work required to make as clean an exit as you can.

[phil@pmtc]

I would say almost none.

HMRC is offering an extra statutory position and any attempt to move away from that usually results in a "take it or leave it" scenario.

Phil's note above is fine so far as tax goes but you also have to deal with the loan, DR charge, possible trust distributions etc. I'm sure he can do all of that but you would be sensible to get a fee quote for all the work required to make as clean an exit as you can.

Thanks Webberg, I strongly agree - there is zero chance of a better settlement even if 1200 people approach.

Further agree all those things listed above are required (and yes I cover them also and include in any conversation/quote).

[webberg]

Thanks Webberg, I strongly agree - there is zero chance of a better settlement even if 1200 people approach.

Further agree all those things listed above are required (and yes I cover them also and include in any conversation/quote).

If you are in the unfortunate place of considering a settlement, you need to ask yourself, what are your objectives?

HMRC promise that a settlement is "final" and that they can help you "exit" the scheme. Beware because neither statement is true.

A couple of examples.

You settle and this includes IHT. Your loan provider declines to write off loans. However sometime later they have a change of heart. HMRC will claim that the later event may also be an IHT event of charge and seek more money.

Eventually, if the loan provider does not write off but you enter into an agreement whereby you repay the loan and receive a sum back as a distribution, HMRC will NOT give you an assurance that the distribution is not taxable, citing instead "extensive double tax relief provisions" which are everything EXCEPT clear, nor will they refund IHT even if the loan is repaid.

These are two of perhaps a dozen of more problems with the CLSO 2.

We and a number of other advisers have asked HMRC to clarify the terms and have got nowhere.

This situation is of ZERO use to you as advisers will have their own view of likely outcomes from this.

I will state that our advice to clients is that unless there are pressing personal issues, the terms are not anywhere near enough to final to contemplate.

I know other advisers have a view that the disputes here are all over bar the shouting and settlement, imperfect as it is, remains the only option.

I will not speak for Phil because I've not discussed with him his strategy.

However an adviser delivers a package as close to his client's objectives as he can get and explains the differences. SO all this is driven from your end - what do you want to achieve and do you understand the compromises and weaknesses of the agreement you ae being asked to sign?

[starstruck]

These are two of perhaps a dozen of more problems with the CLSO 2.

Let's say your loans are already written off (both formally in writing plus the trust is gone also, so nobody that could ever demand money or be repaid).

You settle, including IHT. Something you are able to afford to do, plus you are not interested in a long (potentially costly and possibly futile) battle with HMRC.

Are there any of your dozen problems here? i.e. what more can HMRC come back for?

[BrownOwl]

Settlement

Phil,

Thanks so much for being avaiable on here.

If I pay up under HMRC's settlement opportunity and subsequent legal action is successful in overturning the 2019 legislation, do you offer a service to arrange a refund of the tax and voluntary restitution I made to HMRC?

Would HMRC also pay me interest on the payments I make in those circumstances?

Do HMRC also pay me a penalty for their errors? If so, what rate would it be?

[phil@pmtc]

Phil,

Thanks so much for being avaiable on here.

If I pay up under HMRC's settlement opportunity and subsequent legal action is successful in overturning the 2019 legislation, do you offer a service to arrange a refund of the tax and voluntary restitution I made to HMRC?

Would HMRC also pay me interest on the payments I make in those circumstances?

Do HMRC also pay me a penalty for their errors? If so, what rate would it be?

Hi

A contract settlement is a legally binding agreement. In short...if you settle then it makes no difference to you what happens in any future. Perhaps some lawyer could fight it but I'm not one and not in a position to say (but id very much doubt theres much they could do). A settlement is that decision...whether to try to get peace of mind now or take the risk and see how pans out. Its why its a very hard choice to make for each individual and why no advisor should say you should def take either option, rather its a case of setting out the facts as known and the individual has to make the call. Its also why id say its extremely important to ensure that any settlement deeds that you sign cover everything you need them to.
Sorry that's a highly depressing answer!