There seem to be a fair few posts around on the above.
This may help.
When agreeing a settlement with HMRC, you are presented with a choice to be made on the loans.
A. If you wish to have them written off (usually within a short period of final agreement) then HMRC will include an IHT (or not, depending on the lender, circumstances, etc).
B. If you choose not to have them written off within the post settlement window, then HMRC has the right to make a further IHT charge when they are written off or otherwise reduced in value.
If you go for option A, then you will need to achieve that write off within the window in order to meet the terms. If you are outside that window then due to the nature of the IHT calculation in many cases (it's based on - approx. - 1% of the loan value per year from the first loan - so it increases over time) HMRC claim that more IHT may be due.
There is NO CONNECTION between the agreed period post settlement for having the loan written off and whatever time to pay you may have agreed.
Even if you have 10+ years to pay the settlement, if you have chosen Option A, you will need to have the loan written off within the 30/90 days after agreement or risk HMRC coming back for more alleged IHT.
Do NOT wait for the end of the payment period.
Some lenders/trusts will agree a write off, usually upon proof that you have settled. (This means that they are unlikely to be chased for tax due on the payments made).
You will have to ask your lender (or whomever claims to own the loan now) for their agreement.
Some will charge a fee of a few or quite a few hundred pounds.
If you have gone for option B, then HMRC will claim that a subsequent write off of the loan may attract an IHT charge in the future. IHT has a self assessment system and the theory (and probably legal obligation) is that when such an event occurs, you are required to make a disclosure.
The above is based on HMRC's interpretation of IHT rules. It is not an interpretation that I consider is correct. A debate in front of a Tribunal may eventually be required to determine the "correct" position.
If you have settled and paid the IHT, then the outcome of that debate makes no difference to you. The settlement is agreed and paid and you cannot recover any of it.
The most often encountered difficulty here is knowing who the lender was, who owns the loans now and how to contact them. This can be worked out with an hour's research in most instances, starting with the original loan agreement and then moving to corporate records in the UK or elsewhere. You will also find that most of the financial regulators in IOM, Guernsey, Jersey, etc are helpful and a call to them will pay dividends.
A loan, once made, cannot disappear without some action from the lender (or of course repayment in money by the borrower which I'm assuming is quite rare). Therefore if the original lender was a company and that company has been dissolved, liquidated, struck off, then the assets will go to the shareholders. Those assets will include the loans.
If the lender was a trust or the loans were moved to a trust, then whilst the trustee can resign they are usually obliged to appoint another trustee. (I think in some instances, the local financial authority may have to step in as trustee). The local financial regulator should be able to help you.
Some advisers will have details of lenders and their contact details. If they are similar to us, we have those details because we have researched the scheme to establish a tax analysis. Often the person who is the current contact point is quite sensitive about their contact details being widely available. It is also usually the fact that we cannot share those details with those who are not our clients for fear of breaching all sorts of rules. We will not therefore publish details of schemes where we know a write off is possible - or where we know requests have been refused.
Hope this helps.
This may help.
When agreeing a settlement with HMRC, you are presented with a choice to be made on the loans.
A. If you wish to have them written off (usually within a short period of final agreement) then HMRC will include an IHT (or not, depending on the lender, circumstances, etc).
B. If you choose not to have them written off within the post settlement window, then HMRC has the right to make a further IHT charge when they are written off or otherwise reduced in value.
If you go for option A, then you will need to achieve that write off within the window in order to meet the terms. If you are outside that window then due to the nature of the IHT calculation in many cases (it's based on - approx. - 1% of the loan value per year from the first loan - so it increases over time) HMRC claim that more IHT may be due.
There is NO CONNECTION between the agreed period post settlement for having the loan written off and whatever time to pay you may have agreed.
Even if you have 10+ years to pay the settlement, if you have chosen Option A, you will need to have the loan written off within the 30/90 days after agreement or risk HMRC coming back for more alleged IHT.
Do NOT wait for the end of the payment period.
Some lenders/trusts will agree a write off, usually upon proof that you have settled. (This means that they are unlikely to be chased for tax due on the payments made).
You will have to ask your lender (or whomever claims to own the loan now) for their agreement.
Some will charge a fee of a few or quite a few hundred pounds.
If you have gone for option B, then HMRC will claim that a subsequent write off of the loan may attract an IHT charge in the future. IHT has a self assessment system and the theory (and probably legal obligation) is that when such an event occurs, you are required to make a disclosure.
The above is based on HMRC's interpretation of IHT rules. It is not an interpretation that I consider is correct. A debate in front of a Tribunal may eventually be required to determine the "correct" position.
If you have settled and paid the IHT, then the outcome of that debate makes no difference to you. The settlement is agreed and paid and you cannot recover any of it.
The most often encountered difficulty here is knowing who the lender was, who owns the loans now and how to contact them. This can be worked out with an hour's research in most instances, starting with the original loan agreement and then moving to corporate records in the UK or elsewhere. You will also find that most of the financial regulators in IOM, Guernsey, Jersey, etc are helpful and a call to them will pay dividends.
A loan, once made, cannot disappear without some action from the lender (or of course repayment in money by the borrower which I'm assuming is quite rare). Therefore if the original lender was a company and that company has been dissolved, liquidated, struck off, then the assets will go to the shareholders. Those assets will include the loans.
If the lender was a trust or the loans were moved to a trust, then whilst the trustee can resign they are usually obliged to appoint another trustee. (I think in some instances, the local financial authority may have to step in as trustee). The local financial regulator should be able to help you.
Some advisers will have details of lenders and their contact details. If they are similar to us, we have those details because we have researched the scheme to establish a tax analysis. Often the person who is the current contact point is quite sensitive about their contact details being widely available. It is also usually the fact that we cannot share those details with those who are not our clients for fear of breaching all sorts of rules. We will not therefore publish details of schemes where we know a write off is possible - or where we know requests have been refused.
Hope this helps.
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