Learn fron NTRT's experience (or not)

[Dmac]

No denying that you are again correct.

It's also worth pointing out that in some instances, if the loan charge in 2018/19 is more than the final liability if the loans are taxed in the year received, then the excess is not repayable.

The only ways to avoid that risk are to settle pre 5th April 2019 or use statutory tax relief.

So, if I understand this correctly, are you saying that if you do not settle and wait for the loan charge to kick in, you would only pay the lower of the loan charge figure or the settlement amount if you had been taxed correctly in the years the loans were advanced?

What are "in some instances"?

[me206et]

So, if I understand this correctly, are you saying that if you do not settle and wait for the loan charge to kick in, you would only pay the lower of the loan charge figure or the settlement amount if you had been taxed correctly in the years the loans were advanced?

What are "in some instances"?

No I think the quote means you will not get any excess payment refunded to you.

[Dmac]

No I think the quote means you will not get any excess payment refunded to you.

Ah, yes, clarified. Many thanks

[webberg]

If your liability - assuming loans are taxed in the year received - is say £50,000 but your loan charge in 2018/19 is £60,000, then when you eventually settle the earlier years any excess is not repayable.

This is why you need to manage/mitigate the loan charge.

[starstruck]

If your liability - assuming loans are taxed in the year received - is say £50,000 but your loan charge in 2018/19 is £60,000, then when you eventually settle the earlier years any excess is not repayable.

This is why you need to manage/mitigate the loan charge.

I assume you mean just for open years here? Seems no point paying LC for closed years and then later settling for them as well. Open years make sense as LC does not close enquiries.

[webberg]

I assume you mean just for open years here? Seems no point paying LC for closed years and then later settling for them as well. Open years make sense as LC does not close enquiries.

We're going into deep waters here.

A closed year cannot be settled except by loan charge or HMRC settlement.

So, you are basically correct, but a lot of implications.