Hi Guys
I thought I maybe nearing the end of this nightmare for the last 3 years as I have paid all the tax owed on the loans via the loan charge and splitting over 3 years, and then HMRC asked me to do the Settlement 2020 process. I have sent them bank statements and details of the loans, contracts etc as they asked, and was hoping the settlement amount would be same as I have paid and be sorted. But I have a number of queries hoping people can help with but I wanted to start with this one. As I feel back to square one when reading this and feel sick about it.
Under this page
https://www.gov.uk/government/public...nheritance-tax
on point 8 - 8. Accrued interest
It says - Many disguised remuneration schemes involve a loan to the employee from a third party. Some of these loans are interest bearing and require the borrower (the employee) to pay interest to the lender, the trustee. Often, this interest is unpaid and either accrues or is added to the loan balance (capitalised).
When a disguised remuneration scheme is closed the trustee may release or write-off the outstanding loan balance. This will give rise to a Part 7A charge on the accrued and capitalised interest, whether this has been paid or not.
Now reading my loan agreement it says:
Interest Interest shall accrue on the amount of the loan advance that is outstanding at any time at a rate of LIBOR plus 4%. Interest shall accrue and be calculated on a daily basis. Interest shall fall due for payment on the 15th of February each year in respect of the interest arising in the previous calendar year.
>>
Which if I understand this correctly would amount to a crazy amount of money and if HMRC were to tax that aswell as the tax I have paid on the loans it would ruin me
my loan total was about £50k for ref
I thought I maybe nearing the end of this nightmare for the last 3 years as I have paid all the tax owed on the loans via the loan charge and splitting over 3 years, and then HMRC asked me to do the Settlement 2020 process. I have sent them bank statements and details of the loans, contracts etc as they asked, and was hoping the settlement amount would be same as I have paid and be sorted. But I have a number of queries hoping people can help with but I wanted to start with this one. As I feel back to square one when reading this and feel sick about it.
Under this page
https://www.gov.uk/government/public...nheritance-tax
on point 8 - 8. Accrued interest
It says - Many disguised remuneration schemes involve a loan to the employee from a third party. Some of these loans are interest bearing and require the borrower (the employee) to pay interest to the lender, the trustee. Often, this interest is unpaid and either accrues or is added to the loan balance (capitalised).
When a disguised remuneration scheme is closed the trustee may release or write-off the outstanding loan balance. This will give rise to a Part 7A charge on the accrued and capitalised interest, whether this has been paid or not.
Now reading my loan agreement it says:
Interest Interest shall accrue on the amount of the loan advance that is outstanding at any time at a rate of LIBOR plus 4%. Interest shall accrue and be calculated on a daily basis. Interest shall fall due for payment on the 15th of February each year in respect of the interest arising in the previous calendar year.
>>
Which if I understand this correctly would amount to a crazy amount of money and if HMRC were to tax that aswell as the tax I have paid on the loans it would ruin me
my loan total was about £50k for ref
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