Vanquish Options - Opinions? (AML/Knox related)

[piebaps]

Agreed webberg.

An Isle of Man company, owned by a BVI company which in turn is owned by a Maltese company is recommending another company (the background of which is as yet unknown) which suggests that I enter into a scheme to mitigate a tax liability caused by my participation in a scheme.

If it looks like a duck, walks like a duck and quacks like a duck, then sadly its likely to be a duck and if a QC says otherwise then I suspect the qualifications attached to his opinion are significantly longer than the opinion itself.

[Genesis]

My advice is that you should go and get professional advice from an unbiased source.

There are a few of us here and I'm sure Google is your friend as well.

If your issue is not so much affording the total, but needing to spread the pain over a number of years, then my advice would be to get some calculation from HMRC under their present offer and discuss how long they might give you to pay.

That is likely, in the medium term, to be less problematic than a "scheme to fix a scheme", which HMRC will, in my opinion, challenge none too gently.

Clearly I have not seen the details of the Vanquish proposal and suspect that they would be reluctant to share them with me. I have therefore no opinion on its bona fides or the strength of its QC opinion. The clue is however in "opinion". Ultimately the test of that opinion is in Court and that might take several years and cost a lot of fees and will not, usually, prevent the tax being paid in the meantime.

You will find professional opinion in these threads varies. Iliketax above has raised a very valid point that replacement loans are just as capable of being taxed as original loans. I know Phil@dtrs has a more pragmatic and less literal legalistic view. I have a view that is founded in our core strategy. I'm sure that some of the other tax advisers mentioned in this forum would be willing to share their views.

The one thing you must do however is pause and think this over once you have information.

Sound advice Webberg.

The way Vanquish explained it to me was not replacing one loan for another - purely that the loan was repaid and was no longer valid. Therefore, HMRC could not apply the LC law on the trustee. Just what mechanism they will use to do that was slightly vague I must say, and I guess, before I handed over 5% to anyone, I'd be looking for some form of comfort blanket that this time, when they say it's irreproachable, it actually is!

5% versus 45% - I know which one I'd be signing up for.

Incidentally, what's the main difference between pre-2016 loans and post?

[webberg]

.

Incidentally, what's the main difference between pre-2016 loans and post?

I'm assuming this was something mentioned to you in your conversation?

The DR Charge is based on loans outstanding at 17th March 2016, less (money) repayments. To the extent that there is a balance outstanding at 5th April 2019 a charge is said to arise.

It may be that the plan proposed plays on this date, otherwise I'm not sure what the significance could be.

[Genesis]

I'm assuming this was something mentioned to you in your conversation?

The DR Charge is based on loans outstanding at 17th March 2016, less (money) repayments. To the extent that there is a balance outstanding at 5th April 2019 a charge is said to arise.

It may be that the plan proposed plays on this date, otherwise I'm not sure what the significance could be.

All I know is that they rapidly changed the structure of the agreement in April 2016 so that you were no longer an employee of AML. I ported over to be an employee of my umbrella and I think this is where the problems have arisen in that the loan is deemed taxable if provided by a 3rd party involved with your employer. Not really sure how it's changed now - umbrella gives to AML gives to trust.

Just thought it strange how they would say up to 17th March 2016 and not for instance 17th March 2018. What stopped them at 2016 when they could keep their boot pressed hard on your throat.

[Loan Ranger]

Even if the loans have been repaid, you still need to provide information on them to HMRC by 30 September 2019, and there are penalties for failure to comply.

See PART 3A - Duty to provide loan charge information to HMRC
https://publications.parliament.uk/p...90151_en_7.htm

You: my loans were £X and they have all been repaid

HMRC: please provide details & evidence of the repayments

You: this is how the loans were repaid

HMRC: we do not accept that as being a valid money repayment

And then the "fun" starts all over again.

[Iliketax]

And then the "fun" starts all over again.

When you say "fun", do you mean paying the 5% fee, paying the 45% tax that wasn't avoided and then paying normal penalties and a 60% GAAR penalty on top of that?

[Loan Ranger]

When you say "fun", do you mean paying the 5% fee, paying the 45% tax that wasn't avoided and then paying normal penalties and a 60% GAAR penalty on top of that?

Aye, something like that. And, no doubt Vanquish will have vanished before the brown stuff hits.

[webberg]

All I know is that they rapidly changed the structure of the agreement in April 2016 so that you were no longer an employee of AML. I ported over to be an employee of my umbrella and I think this is where the problems have arisen in that the loan is deemed taxable if provided by a 3rd party involved with your employer. Not really sure how it's changed now - umbrella gives to AML gives to trust.

Just thought it strange how they would say up to 17th March 2016 and not for instance 17th March 2018. What stopped them at 2016 when they could keep their boot pressed hard on your throat.

OK. That makes more sense.

There was a change of law that became effective in 2016 making some parties liable to PAYE on certain sums. A change of law that certainly pushed some schemes into insolvency.

Presumably the umbrella is taxing everything?

Ignore the 17/3/16 now as that was a false trail - sorry.

[webberg]

When you say "fun", do you mean paying the 5% fee, paying the 45% tax that wasn't avoided and then paying normal penalties and a 60% GAAR penalty on top of that?

Do you think a GAAR penalty will apply?

[Iliketax]

Do you think a GAAR penalty will apply?

What's the plan? Don't know as no one will tell you? Do you think that whatever it might be is a reasonable course of action? Are there any GAAR opinions on disguised remuneration that might give a view on what the GAAR Advisory Panel think on, say, tripartite agreements as a way of trying to side step the disguised remuneration legislation? Is there any history of HMRC asking questions on GAAR involving contrived schemes? Do bears have an outside lavatory?

For those that have no idea what I'm talking about:

The GAAR is intended to bring to an end, so far as possible, the game of legislative catch-up and to make sure that ’keep off the grass’ warnings are heeded. If, therefore, a TAAR has been
introduced with a clear purpose of preventing a particular type of behaviour but a taxpayer enters into arrangements that are intended to exploit a loophole or shortcoming in the TAAR and obtain a benefit that is clearly unintended, the GAAR will apply.

https://www.rossmartin.co.uk/penalti...gaar-penalties

https://assets.publishing.service.go...rangements.pdf

https://www.croweclarkwhitehill.co.u...ing-gaar-cert/

http://weknowmemes.com/wp-content/up...-the-woods.jpg