HMRC settlement Deadlines/delays and the LC

[Iter]

How does one request the release of a loan? Is this done directly to the trust/ via the promoter? Is there any reason why this could be refused, or is it an option that must be adhered to?

[Mickyqaqc123]

Help

There's a lot of understandable worry and panic as deadline number 1 approaches. So I'm posting this to calm fears on the same queries I keep hearing

These are 100% correct. HMRC will tell you themselves and i've got it in writing from them also.


1.You only need to register interest by 31 May. No loan details are required to be given.

2.Loan details to be provided by end Sep deadline.

Now, if those 2 things are done, then your obligations are 100% complete at that stage,

The loan charge will NOT kick in due to HMRC delays. As long as you/your advisor meets the deadlines you are 100% ok to settle.
When you receive the settlement deeds, there will be a deadline on them to sign. As long as that deadline is met, you are fine. You will settle and not be affected by the LC.

Also, whilst on the subject, if you're unaware, they have confirmed that the loan charge isn't final and they could come back for more, such as interest. (which realistically means they 100% will come back)

Finally - and I hope the mods don't mind me posting this part but its purely to help. All clients of mine will receive an email at least 24 hours before the deadline at end of this month confirming they are definitely registered with HMRC.

Phil
I've just received a letter from AML telling me I'm caught up in the Loan Charge
If I Register is it easy enough to fill the forms in yourself or should an accountant be hired
I've got the details of monies sent and received
any help is really appreciated
M123

[lowpaidworker]

Hi


I received a letter saying they were investigating.... see below

"I am writing to update you about our checks into the payments described as loans that you received from XXXX Consulting Ltd arrangement. As there are large numbers of individuals who received such payments I am conducting inquiries into how the arrangements operated by concentrating on a sample of users. You are presently not part of that sample however I may need additional documents and information from you to progress our checks, if I do I will write to you further.

You should also be aware that, as XXXX loans have been transferred to a third party, a new charge will become due on the 5th April 2019 which will tax all untaxed, outstanding loans received that represent income. This charge may result in a higher charge than settling before 5/4/19 and will not close our checks. We will write to with further information on the loan charge"


Will HMRC contact everyone by September or do you have to contact them. I sent an email to them and got an auto response. Given they have got all the information can I assume they will now write to me ?

[Dmac]

Hi


I received a letter saying they were investigating.... see below

"I am writing to update you about our checks into the payments described as loans that you received from XXXX Consulting Ltd arrangement. As there are large numbers of individuals who received such payments I am conducting inquiries into how the arrangements operated by concentrating on a sample of users. You are presently not part of that sample however I may need additional documents and information from you to progress our checks, if I do I will write to you further.

You should also be aware that, as XXXX loans have been transferred to a third party, a new charge will become due on the 5th April 2019 which will tax all untaxed, outstanding loans received that represent income. This charge may result in a higher charge than settling before 5/4/19 and will not close our checks. We will write to with further information on the loan charge"


Will HMRC contact everyone by September or do you have to contact them. I sent an email to them and got an auto response. Given they have got all the information can I assume they will now write to me ?

HMRC are very unlikely to contact you before the end of September, unless you have already contacted them to ask for a settlement pack).

If you are looking to settle your tax, all of your information must be with them by the end of this month, otherwise they cannot guarantee that you will be able to settle before the Loan Charge kicks in (April 2019).

[lowpaidworker]

HMRC are very unlikely to contact you before the end of September, unless you have already contacted them to ask for a settlement pack).

If you are looking to settle your tax, all of your information must be with them by the end of this month, otherwise they cannot guarantee that you will be able to settle before the Loan Charge kicks in (April 2019).

I sent them this many years ago (circ 2013) after they sent me a request to audit my tax return. Gave them all the loan statements/bank statements etc. Still got the records. They sent me a tax claim which at the time my employer said to challenge. HMRC accepted that and put it on hold and haven't heard anything until April this year.

Should I be doing this all this again and sending loan amounts ?

What happens if I agree a settlement only to find that the retrospective nature of this LC is challenged successfully ?

[Dmac]

I sent them this many years ago (circ 2013) after they sent me a request to audit my tax return. Gave them all the loan statements/bank statements etc. Still got the records. They sent me a tax claim which at the time my employer said to challenge. HMRC accepted that and put it on hold and haven't heard anything until April this year.

Should I be doing this all this again and sending loan amounts ?

What happens if I agree a settlement only to find that the retrospective nature of this LC is challenged successfully ?

I understand you are not committed to settling until you sign the agreement (which HMRC will provide once they have all your info by 30/09/2018 and agreed the calculations with you), and that this can be up to April 2019.

However I don't think anyone expects the LC to be successfully challenged by then. And if you settle and pay what they say you owe, and a future challenge is successful you won't get a penny back.

[Moss Piglet]

Writing loans off and inheritance tax charge

Can some one elighten me as to why there could be an inheritance tax charge if a loan is written off?

I saw this on the settlement pack I received from HMRC and also noticed references to IHT on this forum. Just wondered what on Earth IHT had to do with loans and disguised remuneration?

TIA

[Vincenth1]

IHT

The structure of some schemes i.e. those using Trusts is likely to result in an IHT tax event arising. So, if you 'voluntarily' settle and contact the Trust to get your loans written off, for which they may be a charge, your details will be passed onto HMRC's IHT Team. The Trust will need to see evidence of settlement. So, in other words, they'll come back for more. I have read that they ask if you intend to get the loans written off within 30 days of settlement. Not sure if this falls outside of the lifetime IHT limit of £325k for a single person, if not, then it may depend on the size of the loans.

[Whysoserious]

It depends on the type of trust (S72 or S86). It has nothing to do with IHT as most people know it and takes no account of the £325k IHT allowance.

In my case, some of my loans were subjected to IHT once written off, some of them were not. This was due to the different schemes I had used where some used S72 and others used S86 trusts.

For reference, approx £120k of loans equalled around £5k in IHT.

[ChimpMaster]

It depends on the type of trust (S72 or S86). It has nothing to do with IHT as most people know it and takes no account of the £325k IHT allowance.

In my case, some of my loans were subjected to IHT once written off, some of them were not. This was due to the different schemes I had used where some used S72 and others used S86 trusts.

For reference, approx £120k of loans equalled around £5k in IHT.

How would one know if their Trust was S72 or S86? And which one of these is subject to IHT?