AML 2019 Loan Charge

[Genesis]

I was an AML client and i received the 2 emails this morning from them and Knox House Trust giving the various options eg Vanquish / PTS etc. I need to get the loan amounts for myself, as such do you know if it would be Knox House i contact rather than AML?

Hi Worried.

Contact PST and ask them to send you a Letter of Authority. They will then request the total loan amount for you (they cannot break it down into years unfortunately so I was told).

There is no charge for this (I double checked!)

[jrock]

I was an AML client and i received the 2 emails this morning from them and Knox House Trust giving the various options eg Vanquish / PTS etc. I need to get the loan amounts for myself, as such do you know if it would be Knox House i contact rather than AML?

Its a good question. AML dont seem to respond to requests for historic loan amounts.

The next tact is to contact PTS (although we all know its the same company anyway). I would use this email to make requests [email protected].

Good luck.

[jrock]

Having received the same emails from AML yesterday, I feel like my world is falling apart and not sure if reading everything I've read so far helps or makes me more stressed - both I suppose.

Is there really nothing that can be done to fight the retrospective ruling? I.e. what would it take to get someone with power to see the sense in overturning the decision to backdate? Surely someone understands the damage that this is going to do for those impacted - now and down the line, not to mention the dangerous precedence being set.

Is anyone exploring this at all or are we resigned to our "options" of settlement/repaying the loan...?

It does appaear that the only options are now to settlement/repaying the loan.

The stress this is having on me is unbearable, need to try and keep it together for my family sake!

[webberg]

It does appaear that the only options are now to settlement/repaying the loan.

The stress this is having on me is unbearable, need to try and keep it together for my family sake!

Sorry to add to your burden, but repaying the loan will have no effect on the tax position.

Your options are:

1. CLSO 2. Pay tax on the loans, plus interest where the year is under enquiry, perhaps NIC for some years. Perhaps some IHT. Ask AML to write the loans off once you've settled.

2. Litigate. We know that AML have been promising a Tribunal case for a long time and we may see it in 2018. That is being paid for by AML at the moment. If they win, expect HMRC to appeal. If they lose, an appeal might be made. In either event it's unclear who pays the bills from that point. Whatever the result, you still have to deal with the loans in some way.

3. Find a resolution that is neither of the above and deal with the HMRC trying to make a DR charge in 2019. Clearly I'm conflicted on this and will say no more.

Managing and mitigating the effecs of the above are discussed at length in other threads.

In all of this however, repaying your loan may result in the DR charge not arising - depends on what happens to the money - but will not stop HMRC pursuing the previous years' liability.

[DOT COM]

So i also received the same emails.

Currently unsure what to do ?
I estimate my earnings to be in the region of between £150 - £200 k on three years 2011 - 2013 with the scheme but ive no idea in how to estimate what the actual amount is.

I see AML's website and contacts have vanished ( bastards).
How should i proceed ?
Contact the HMRC directly ?
Is there any option to pay early and reduce the fee ?

[Genesis]

Sorry to add to your burden, but repaying the loan will have no effect on the tax position.

Your options are:

1. CLSO 2. Pay tax on the loans, plus interest where the year is under enquiry, perhaps NIC for some years. Perhaps some IHT. Ask AML to write the loans off once you've settled.

2. Litigate. We know that AML have been promising a Tribunal case for a long time and we may see it in 2018. That is being paid for by AML at the moment. If they win, expect HMRC to appeal. If they lose, an appeal might be made. In either event it's unclear who pays the bills from that point. Whatever the result, you still have to deal with the loans in some way.

3. Find a resolution that is neither of the above and deal with the HMRC trying to make a DR charge in 2019. Clearly I'm conflicted on this and will say no more.

Managing and mitigating the effecs of the above are discussed at length in other threads.

In all of this however, repaying your loan may result in the DR charge not arising - depends on what happens to the money - but will not stop HMRC pursuing the previous years' liability.

Webberg.... what's your understanding of the method used for repaying the loans and what gives you that lack of confidence that this would get HMRC off our backs?

[jrock]

Sorry to add to your burden, but repaying the loan will have no effect on the tax position.

Your options are:

1. CLSO 2. Pay tax on the loans, plus interest where the year is under enquiry, perhaps NIC for some years. Perhaps some IHT. Ask AML to write the loans off once you've settled.

2. Litigate. We know that AML have been promising a Tribunal case for a long time and we may see it in 2018. That is being paid for by AML at the moment. If they win, expect HMRC to appeal. If they lose, an appeal might be made. In either event it's unclear who pays the bills from that point. Whatever the result, you still have to deal with the loans in some way.

3. Find a resolution that is neither of the above and deal with the HMRC trying to make a DR charge in 2019. Clearly I'm conflicted on this and will say no more.

Managing and mitigating the effecs of the above are discussed at length in other threads.

In all of this however, repaying your loan may result in the DR charge not arising - depends on what happens to the money - but will not stop HMRC pursuing the previous years' liability.

1. CLSO 2. Pay tax on the loans, plus interest where the year is under enquiry, perhaps NIC for some years. Perhaps some IHT. Ask AML to write the loans off once you've settled.
It never ends, for those that want to end this saga and move on with their lives there is never ending costs involved.

2. Litigate. We know that AML have been promising a Tribunal case for a long time and we may see it in 2018. That is being paid for by AML at the moment. If they win, expect HMRC to appeal. If they lose, an appeal might be made. In either event it's unclear who pays the bills from that point. Whatever the result, you still have to deal with the loans in some way.
What is the whole opint of even asking AML regarding the tribunal? The DR charge comes into effect next year and its probably the tribunal wont happen before then. In the mean time it looks as if we need to settle in anycase. Say i settled before the Loan 2019 charge came into effect and then in say 2020 the tribunal went head in favour of AML. Will we get the settlement cash back? doubt it

3. Find a resolution that is neither of the above and deal with the HMRC trying to make a DR charge in 2019. Clearly I'm conflicted on this and will say no more.
It seems im stuffed either way, i want to make a settlement but its looking likely this will be extortinate and cripple me financially. I have no idea how much the Loan 2019 effect will have on me but know that it is likley to be just as crippling or worse! Maybe if settlement is looking bleak then i should just take a punt on the Loan 2019 charge and see if its managable.

[webberg]

Webberg.... what's your understanding of the method used for repaying the loans and what gives you that lack of confidence that this would get HMRC off our backs?

To avoid the LC 2019, you need to repay your loans in money. Further that repayment should not itself be part of a tax avoidance scheme and there should not be a means by which you get the money back. Either of those results (even where the trustee is perhaps complying with a trust deed that is 15 years old), will result in HMRC challenge. If that challenge is correct, the LC 2019 charge will be applied.

Further, its arguable (and we think HMRC will argue this) that if you repay the loan and the trustee makes arrangements to move the money back to you at a later time, in the meantime, earmarking the funds for you, then you have a payment within Part 7A ITEPA 2003 and that in itself is taxable.

So a repayment of the loan in any manner that sees the funds coming back to you risks the LC 2019 charge applying and/or the Part 7A charge arising.

I know some here claim that only one of those charges will apply. I would put money on HMRC trying both on.

Regardless of the above, HMRC's position is that the loans drawn in earlier years remain taxable income on which you owe money. The LC 2019 charge is claimed to be a separate charge on a new source and does not impact this argument. (Again, you will find some here who claim that once HMRC has the LC 2019 money, they will close all enquiries - with respect, I disagree with that.)

If eventually you agree that tax is due in earlier years, then the money you paid under LC 2019 is a credit against that liability (including interest).

So you are dealing with two tax charges.

LC 2019 which needs to be avoided by repaying loans in money and not getting it back.

The general tax charge in earlier years which is under enquiry and which HMRC cannot release you from without a change in their policy.

[DOT COM]

So i called WTT and arranged an initial revue etc

[webberg]

1. CLSO 2. Pay tax on the loans, plus interest where the year is under enquiry, perhaps NIC for some years. Perhaps some IHT. Ask AML to write the loans off once you've settled.
It never ends, for those that want to end this saga and move on with their lives there is never ending costs involved.

2. Litigate. We know that AML have been promising a Tribunal case for a long time and we may see it in 2018. That is being paid for by AML at the moment. If they win, expect HMRC to appeal. If they lose, an appeal might be made. In either event it's unclear who pays the bills from that point. Whatever the result, you still have to deal with the loans in some way.
What is the whole opint of even asking AML regarding the tribunal? The DR charge comes into effect next year and its probably the tribunal wont happen before then. In the mean time it looks as if we need to settle in anycase. Say i settled before the Loan 2019 charge came into effect and then in say 2020 the tribunal went head in favour of AML. Will we get the settlement cash back? doubt it

3. Find a resolution that is neither of the above and deal with the HMRC trying to make a DR charge in 2019. Clearly I'm conflicted on this and will say no more.
It seems im stuffed either way, i want to make a settlement but its looking likely this will be extortinate and cripple me financially. I have no idea how much the Loan 2019 effect will have on me but know that it is likley to be just as crippling or worse! Maybe if settlement is looking bleak then i should just take a punt on the Loan 2019 charge and see if its managable.

1. Certainly some promoters are seeing an opportunity for fees for a long time. In defence of AML (and I'm not connected to them) they have stayed with their scheme and are going to litigation at their cost which is more than most.

2. The point is that if they win, perhaps - no guarantee - perhaps the LC 2019 charge will not arise. if you settle, then you exclude yourself from the result of a subsequent litigation decision, either way.

3. Paying the loan charge is not settling. HMRC will continue to seek agreement on earlier years. You need to do some careful calculations.

HMRC said yesterday to a Parliamentary Enquiry that they always will agree time to pay for taxpayers.

In practice, despite being told otherwise, we have not seen any agreements beyond 4 years under settlement or any other arrangement. Usually 24 months is a limit and going above that requires everybody in HMRC to agree to it.