Clso2 - anyone??

[Loan Ranger]

I registered my interest in CLS02 2 weeks ago when responding by email to a request for loan statements, (frustratingly one that I had previously send them!), I asked them for a figure for CLS02 and for the LC19. Not heard anything, didn't even get confirmation of my email. So I will write to them as well to make sure that they have received my request.

They probably won't be able to give you a tax figure for LC19 because it depends on what other income you have in 2018/19, whether you contribute to a pension etc.

[Finalwhistle]

I plan on sending a letter recorded delivery and an email as proof of sending and receipt. Wouldn’t want to take a risk

[burnside]

They probably won't be able to give you a tax figure for LC19 because it depends on what other income you have in 2018/19, whether you contribute to a pension etc.

True, but I asked for an indicative figure based on the loans that I have received and they know about, but I should be able to calculate that myself based on a 40/45% split. The CLSO figure is the more difficult one for me mainly due to the late payment interest they will be charging.

[Loan Ranger]

The CLSO figure is the more difficult one for me mainly due to the late payment interest they will be charging.

There is a late payment interest calculator somewhere on HMRC's website, but the figures below are very close.

This is the accrued interest as of end of Feb 2018. Interest is currently accruing at 3% flat (non compound) per annum eg. if you were to settle in 6 months time just add another 1.5%.

Tax Year ___ Interest
2001/2 _____ 72.1%
2002/3 _____ 65.6%
2003/4 _____ 59.4%
2004/5 _____ 52.0%
2005/6 _____ 45.4%
2006/7 _____ 38.0%
2007/8 _____ 30.1%
2008/9 _____ 25.2%
2009/10 ____ 21.2%
2010/11 ____ 18.2%
2011/12 ____ 15.2%
2012/13 ____ 12.2%
2013/14 ____ 9.2%

Example

Suppose your additional tax liability for 2008/9 is £10,000.

The interest would be £10,000 * 25.2% = £2,520

[burnside]

What about for 14/15 and 15/16, do they have those rates as well? Although I'm going have a stab at 6.2% and 3.2%

[ChimpMaster]

How do you know if IHT is applicable under CLSO2?

If the loan is closed off or repaid - is it just a case of HMRC assuming IHT applies, and charging you regardless?

[Finalwhistle]

How do you know if IHT is applicable under CLSO2?

If the loan is closed off or repaid - is it just a case of HMRC assuming IHT applies, and charging you regardless?

see "made atlas shrug" post on other forums. He went through CLSO and was nearly charged second IHT.

[ChimpMaster]

see "made atlas shrug" post on other forums. He went through CLSO and was nearly charged second IHT.

I believe his situation was that HMRC gave him a settlement figure and said "that's it, no more tax is due for you for these loans" and he agree and paid it. HMRC's IHT dept. then came along and said "oh yes, we see you closed off these loans, so you now owe us IHT".

The settlement figure didn't include IHT but given HMRC's wording on the agreement, they had promised that the settlement amount was final in terms of tax due.

So he fought back against HMRC's IHT dept and eventually they had to back down.


My questions still stand:

How do you know if IHT is applicable under CLSO2?

If the loan is closed off or repaid - is it just a case of HMRC assuming IHT applies, and charging you regardless?

[Finalwhistle]

My questions still stand:

How do you know if IHT is applicable under CLSO2?

If the loan is closed off or repaid - is it just a case of HMRC assuming IHT applies, and charging you regardless?

Probably worth asking in an advisor thread. My understanding is it applies to trust based loans only.

[phil@pmtc]

My understanding is it applies to trust based loans only.

Correct