Trust demanding repayment of loan

[webberg]

Please be careful here.

The title of the thread "trust demanding repayment" is inaccurate. The trustee - Pinotage - has allegedly sold the creditor rights that they held to another firm.

Do you know - have you asked - what value Pinotage obtained and what they intend to do with any value obtained? Do you know if the creditor rights were an asset of the trust? Do you know if the creditor rights are different from the ownership of the loans? Do you know if any action undertaken with the new owner of the creditor rights is a loan write off?

Have you asked the above questions of Pinotage, FS Capital, those who were behind the scheme that claims to have created the loan and the (possibly distinct) creditor rights?

It seems to me here that people have used 50% of the facts to jump to 100% of a conclusion.


I would urge you to get the facts BEFORE making assumptions or leaping blindly off a cliff.

[Forsythia]

Please be careful here.

The title of the thread "trust demanding repayment" is inaccurate. The trustee - Pinotage - has allegedly sold the creditor rights that they held to another firm.

Do you know - have you asked - what value Pinotage obtained and what they intend to do with any value obtained? Do you know if the creditor rights were an asset of the trust? Do you know if the creditor rights are different from the ownership of the loans? Do you know if any action undertaken with the new owner of the creditor rights is a loan write off?

Have you asked the above questions of Pinotage, FS Capital, those who were behind the scheme that claims to have created the loan and the (possibly distinct) creditor rights?

It seems to me here that people have used 50% of the facts to jump to 100% of a conclusion.


I would urge you to get the facts BEFORE making assumptions or leaping blindly off a cliff.

Hi Webberg.

Yep - title was misleading. Apologies. It was FS Capital who were demanding repayment of loans. However, despite their letter demanding repayment, it seems they are not. But quite what the relationship is between them and Pinotage I don't know since Pinotage are still in the picture and are choosing which loans to assign via FS Capital and which not.

Not knowing much, I do not know about creditor rights although I am assuming you mean do they have the right to sell these loans on? If so, I am pretty sure yes (there was some notification of the trustees voting themselves this right some time ago and the loan agreement pretty much makes it clear too).

I guess my line is that I doubt the loan charge will be cancelled or the retroactive tax be tempered in any way and so at some point I am going to have to settle with HMRC and get all the loans written off. Pinotage want my loan written off now, before I have settled with HMRC. I don't see I really have a choice over this and to be honest, after 6 years of sleepless nights and rows I just want stuff sorted out. Whether IHT will be due or not, I don't know and what difference it makes one way or another in the timing I also don't know. The promoters just want more money to explain this to me and I am not in the mood to pay them. I also doubt I can trust what they tell me.

[webberg]

I don't see I really have a choice over this and to be honest, after 6 years of sleepless nights and rows I just want stuff sorted out. Whether IHT will be due or not, I don't know and what difference it makes one way or another in the timing I also don't know. The promoters just want more money to explain this to me and I am not in the mood to pay them. I also doubt I can trust what they tell me.

First - go and get advice. You are probably discussing a significant sum here and if it was in relation to buying a big asset, providing for your family, etc, you would get advice. Not from an anonymous name on a forum, but something from somebody who has a provable expertise and no obvious conflict of interest.

Second, a loan write off now - in advance of a settlement - WILL DEFINITELY create a tax liability. That will be a liability at the time of the event (2019/20 tax year). That event may or may not be reduced in value by a liability arising from a prior event but will probably NOT be reduced by a subsequent event. (After all that is retrospection and if the position were reversed and if HMRC said this would be the case, we would all be crying "foul"!)

Third, it's entirely possible that an IHT event has already happened. Usually placing funds outside your estate (i.e. immediate control and possession) but into the hands of a connected party, such as a trust, starts the IHT clock. If the value of those funds held by the connected party reduces, then your estate increases. If so, then a liability may arise on the fall in value that could be for the trust/ee and/or you. Here we apparently have the disposal by a trust of a loan to you, but to a non trust. Hard to see that there will not be some HMRC enquiry.

Fourth, the promoters are presumably those who sold you K2/Hyrax. That may have been directly or via an agent. Those who were behind the scheme, claimed a couple of weeks ago that they were unaware of the transaction between Pinotage and FS Capital. If that is the case, then presumably they do not stand to gain from any action taken by FS Capital?

You do need to separate what you know from what you think may be the case.

If there are things that you need to know, then go and ask.

Do NOT however act on anything that you do not understand or appreciate the consequences of.

Go and get advice.

[BrilloPad]

Go and get advice.

I strongly agree with that - I don't think it can be stressed enough.

[Forsythia]

First - go and get advice. You are probably discussing a significant sum here and if it was in relation to buying a big asset, providing for your family, etc, you would get advice. Not from an anonymous name on a forum, but something from somebody who has a provable expertise and no obvious conflict of interest.

Second, a loan write off now - in advance of a settlement - WILL DEFINITELY create a tax liability. That will be a liability at the time of the event (2019/20 tax year). That event may or may not be reduced in value by a liability arising from a prior event but will probably NOT be reduced by a subsequent event. (After all that is retrospection and if the position were reversed and if HMRC said this would be the case, we would all be crying "foul"!)

Third, it's entirely possible that an IHT event has already happened. Usually placing funds outside your estate (i.e. immediate control and possession) but into the hands of a connected party, such as a trust, starts the IHT clock. If the value of those funds held by the connected party reduces, then your estate increases. If so, then a liability may arise on the fall in value that could be for the trust/ee and/or you. Here we apparently have the disposal by a trust of a loan to you, but to a non trust. Hard to see that there will not be some HMRC enquiry.

Fourth, the promoters are presumably those who sold you K2/Hyrax. That may have been directly or via an agent. Those who were behind the scheme, claimed a couple of weeks ago that they were unaware of the transaction between Pinotage and FS Capital. If that is the case, then presumably they do not stand to gain from any action taken by FS Capital?

You do need to separate what you know from what you think may be the case.

If there are things that you need to know, then go and ask.

Do NOT however act on anything that you do not understand or appreciate the consequences of.

Go and get advice.

Thanks Webberg


Appreciate the advice. The decision to get the loan written off now is not taken likely. The only question I need to know the answer to is what is the difference between the loan being written off now or after HMRC settlement. I think it very likely there will be an IHT charge but will the charge differ greatly??

[webberg]

Thanks Webberg


Appreciate the advice. The decision to get the loan written off now is not taken likely. The only question I need to know the answer to is what is the difference between the loan being written off now or after HMRC settlement. I think it very likely there will be an IHT charge but will the charge differ greatly??

A loan write off is taxable.

When you settle, the terms (usually) say that the tax paid via the settlement will prevent a charge on a subsequent write off being taxable. This carries a condition normally that the write off is within a given time AFTER the settlement.

So a write off AFTER formal settlement should produce just one tax charge.

A write off BEFORE settlement creates a tax charge and renders settlement otiose. Unfortunately however the lack of a formal settlement may also allow HMRC to continue their enquiries into the years in which the loan was received and to eventually decide that that some tax was due. That "earlier" tax may be due IN ADDITION TO the tax on the loan wrote off.

There is a process under which the tax on the write off can be reduced for an earlier liability but (n my opinion) it is far from clear that this can happen or that there can be a perfect match. Whilst the principle is that income should be taxed only once, I consider it possible that tax can be due on the "income" in the earlier year and tax due on the "write off" in a later year because they carry different labels.

There are some on here who have an analysis that varies from the above and are more comfortable that tax will be paid just once. Whilst I respect those views and follow their logic, I do not agree 100% with them.

There are some here who will say that simple common sense and fairness dictate that tax is paid only once. I'm afraid that those virtues have long fled the pages of tax law and carry (in my opinion) little weight.

On IHT, like I said, the charge may have already happened. There is likely to be little difference in that quantum of that charge.

Go and get advice.

[Forsythia]

A loan write off is taxable.

When you settle, the terms (usually) say that the tax paid via the settlement will prevent a charge on a subsequent write off being taxable. This carries a condition normally that the write off is within a given time AFTER the settlement.

So a write off AFTER formal settlement should produce just one tax charge.

A write off BEFORE settlement creates a tax charge and renders settlement otiose. Unfortunately however the lack of a formal settlement may also allow HMRC to continue their enquiries into the years in which the loan was received and to eventually decide that that some tax was due. That "earlier" tax may be due IN ADDITION TO the tax on the loan wrote off.

There is a process under which the tax on the write off can be reduced for an earlier liability but (n my opinion) it is far from clear that this can happen or that there can be a perfect match. Whilst the principle is that income should be taxed only once, I consider it possible that tax can be due on the "income" in the earlier year and tax due on the "write off" in a later year because they carry different labels.

There are some on here who have an analysis that varies from the above and are more comfortable that tax will be paid just once. Whilst I respect those views and follow their logic, I do not agree 100% with them.

There are some here who will say that simple common sense and fairness dictate that tax is paid only once. I'm afraid that those virtues have long fled the pages of tax law and carry (in my opinion) little weight.

On IHT, like I said, the charge may have already happened. There is likely to be little difference in that quantum of that charge.

Go and get advice.

Thanks for the information Webberg. Very helpful. I do appreciate it.

[DavidD]

Latest letters from FS Capital

Although, I have not seen the letters myself I understand that FS Capital have written again demanding 6% of the loan balance unless you have had the loan written off by Pinotage. The letter apparently states that if you don’t take one of three options that each incur a 6% fee you will have to pay the entire loan by 31st January 2020 (LOL)

The actual Scheme providers are now starting litigation against Pinotage… you could not make this up – what a shambles.

I and all the people I know who were caught up in this are 100% clear – we are not paying a single penny to FS Capital – I suggest the same for everyone – Hold the Line.

Just to reiterate I haven’t actually received the letter from FS Capital myself.

[Jamesbridge]

FS capital and K2

Hiya all,

I've had my solicitors look into this and it appears that there is a bit of hope given that the loan agreement that I provided them details that it should have been redeemed by a certain date and that any claim by FS capital would be time barred given that the claim is out of time and statute barred given the limited act 1980.

What I need however to confirm this is a copy of a loan agreement from K2, which neither I nor any of my former colleagues incidentally seem to have a copy of which makes me wonder if there even was a new loan document for K2...?

Anyone who has a k2 loan document, please feel free to contact me, and in return will forward my solicitors full advice on the subject in return.

These guys are just crooks and opportunists.

Cheers,

James

[votfosq]

Hiya all,

I've had my solicitors look into this and it appears that there is a bit of hope given that the loan agreement that I provided them details that it should have been redeemed by a certain date and that any claim by FS capital would be time barred given that the claim is out of time and statute barred given the limited act 1980.

What I need however to confirm this is a copy of a loan agreement from K2, which neither I nor any of my former colleagues incidentally seem to have a copy of which makes me wonder if there even was a new loan document for K2...?

Anyone who has a k2 loan document, please feel free to contact me, and in return will forward my solicitors full advice on the subject in return.

These guys are just crooks and opportunists.

Cheers,

James

Hello James - I have some information including loan agreements. Let me know if I can help with providing this info for you and yes, I'm very keen to see what your solicitors have advised.