Trust demanding repayment of loan

[surfgeo]

a write off within the allocated time (30 days?) will not attract a liability.

I've been trying to get Pinotage to contact me since the summer of 2018 when I settled with HMRC to write off the loans......sounds like I'm in a right black hole!!!!!

[DealorNoDeal]

Not entirely true.

If you have settled via the present (suspended) settlement opportunity, then a write off within the allocated time (30 days?) will not attract a liability.

A settlement outside the present opportunity? I can see nothing in the terms that would exempt a loan write off from being taxable under statute.

Would paying tax on the loan exempt a write off charge? Difficult to see how in law.

The value of the relevant step (the write off) can be reduced where the amount has been taxed before but that is a technical minefield.

I thought there were meant to be safeguards against Double Taxation?

I can't believe Parliament intended people to be taxed twice on the same fecking loan.

If HMRC tried to pull that sh.t on me, I'd get my MP on the fecking case.

And, yes, I'd be doing a lot of fecking swearing!

[Spit]

I've been trying to get Pinotage to contact me since the summer of 2018 when I settled with HMRC to write off the loans......sounds like I'm in a right black hole!!!!!

How have you been trying to contact Pinotage? I had a response from them today.

[surfgeo]

How have you been trying to contact Pinotage? I had a response from them today.

E-mail, same as one of my colleagues, he got answered. I have sent a couple more this week as well

[Iliketax]

I thought there were meant to be safeguards against Double Taxation?

I can't believe Parliament intended people to be taxed twice on the same fecking loan.

If HMRC tried to pull that sh.t on me, I'd get my MP on the fecking case.

And, yes, I'd be doing a lot of fecking swearing!

Of course there are safeguards:

- s554Z5 ITEPA 2003 Finance Act 2017 This one applies where you've already paid the tax. It works on a "gross" basis and so means that the amount subject to tax on the second event (e.g. the waiver) will be reduced (potentially to zero if you've paid tax on the whole of the loan and then the whole of that loan is waived).


- 554Z11B+ ITEPA 2003 Finance Act 2017 This one applies where you've not paid any tax yet. It works on a tax asis and means that if you pay one lot of tax it covers both tax liabilities. It's a bit clumsier when tax is paid at different rates but gives double tax relief.

The version of s554Z5 I have linked to have some amendments made to it by para 46(6) Sch 11 F(No2)A 2017 to cover the April 2019 loan charge:

(12) See paragraphs 4(5) and (6) and 12(4) and (5) of Schedule 11 of F(No. 2)A 2017) for provision about the effect of subsection (3) in certain cases where the relevant step is within paragraph 1 of that Schedule.

You can find those paragraphs here: Finance (No. 2) Act 2017

But for completeness, these have nothing to do with inheritance tax - that's entirely separate.

[DealorNoDeal]

Of course there are safeguards:

- s554Z5 ITEPA 2003 Finance Act 2017 This one applies where you've already paid the tax. It works on a "gross" basis and so means that the amount subject to tax on the second event (e.g. the waiver) will be reduced (potentially to zero if you've paid tax on the whole of the loan and then the whole of that loan is waived).


- 554Z11B+ ITEPA 2003 Finance Act 2017 This one applies where you've not paid any tax yet. It works on a tax asis and means that if you pay one lot of tax it covers both tax liabilities. It's a bit clumsier when tax is paid at different rates but gives double tax relief.

The version of s554Z5 I have linked to have some amendments made to it by para 46(6) Sch 11 F(No2)A 2017 to cover the April 2019 loan charge:



You can find those paragraphs here: Finance (No. 2) Act 2017

But for completeness, these have nothing to do with inheritance tax - that's entirely separate.

Thanks, always good to get a 2nd opinion.

[webberg]

yes it is.

I've said before here that the sections mentioned above are all in the part of the act dealing with disguised remuneration. In order to "benefit" from them, you have to accept that the funds subject to tax are within the definition which is largely found in section 554A ITEPA.

I have a concern that the Rangers case - which decided that the money should be taxed courtesy of sections of the Act outside Part 7A and sec 554A - means that the tax credit system will not work as suggested.

It's a point I have put to HMRC at least three times now and have either had different answers or more recently, no answer.

I would absolutely agree that there is a principle, written in the case of disguised remuneration, that says income should not be tax twice.

I would also point out cases in which it has been held that sums can be taxed twice if what was done with them falls foul of anti avoidance law.

[Paralytic]

I have a concern that the Rangers case - which decided that the money should be taxed courtesy of sections of the Act outside Part 7A and sec 554A - means that the tax credit system will not work as suggested.

Not directly related, but I thought this might be of interest to some.

Rangers tax case: HMRC blamed for downfall of club | Scotland | The Times

Paywalled, but a search of the first sentence will get you the full article.

[Iliketax]

In order to "benefit" from them, you have to accept that the funds subject to tax are within the definition which is largely found in section 554A ITEPA.

I have a concern that the Rangers case - which decided that the money should be taxed courtesy of sections of the Act outside Part 7A and sec 554A - means that the tax credit system will not work as suggested.

That's not what the bit I've underlined says:

(1)This section applies if there is overlap between—
(a)the sum of money or asset (“sum or asset P”) which is the subject of the relevant step, and
(b)a sum of money or asset (“sum or asset Q”) by reference to which, on an occasion that occurred before the relevant step is taken, A became subject to a liability for income tax (“the earlier tax liability”).

It just says "income tax" and so that would include earnings (as per Rangers). If your view was right, "income tax" would have to be changed to say something like "employment income tax on an amount that counts as employment income under section 554Z2(1)". For completeness, the wide definition of "income tax" is narrowed by sub-section (9)(b) to exclude tax charged under the cheap loan rules (so not relevant to your point).

[Iliketax]

Not directly related, but I thought this might be of interest to some.

Rangers tax case: HMRC blamed for downfall of club | Scotland | The Times

Paywalled, but a search of the first sentence will get you the full article.

You can see the article here: TimesEditorScotland on Twitter: "Here’s the front page of Thursday’s @thetimesscot ...… "

Someone has written a blog post to say why they think the article is spin: Just when I thought I was out, they pull me back in! | Rangers Tax Case