Edge EBT thread

[Dylan]

"plain double taxation"

That was my thought.

The two would seem to be mutually exclusive.

Either it was income and subject to income tax or loan and subject to inheritance tax. Not both. Makes no sense. How can HMRC expect to be taken seriously when they apply such logic? How can they possibly expect people to settle on these terms? Complete stupidity.

Still wondering if selling my debt to my new limited company and then (if need be) paying from the limited company account (saving corporation etc etc) is an option?

HMRC aren't selling your debt? Even if they were your company couldn't buy it without there being a somewhat large benefit to you and hence a taxable event.

[ScottW]

"plain double taxation"

That was my thought.

The two would seem to be mutually exclusive.

Either it was income and subject to income tax or loan and subject to inheritance tax. Not both. Makes no sense. How can HMRC expect to be taken seriously when they apply such logic? How can they possibly expect people to settle on these terms? Complete stupidity.

Still wondering if selling my debt to my new limited company and then (if need be) paying from the limited company account (saving corporation etc etc) is an option?

[StrengthInNumbers]

Underbase hit the nail on head.

[Underbase]

Or you are being taxed on the benefit accruing from you having access to the loan amounts....? Even if you repay them now, you had the benefit for the period in question.

The thing to remember with all these schemes, even the good ones, the tax doesn't vanish, it is merely deferred. Hence the inevitable link to Inheritance Tax. (I seem to remember pointing that out in around 2007 and was widely ridiculed for it. Ho hum...)

I think the point the poster was asking about is, if they are claiming it is income (and charging interest on it which is the charge for having benefit of it), then how can there be an inheritance tax charge as for tax purposes, there never was a loan (this is what HMRC are claiming, but not what I believe).

I two am confused on how they can apply IHT on this as it seems like plain double taxation. It is I guess one of the reasons the "settlement offer" seems so unappealing.

[malvolio]

Or you are being taxed on the benefit accruing from you having access to the loan amounts....? Even if you repay them now, you had the benefit for the period in question.

The thing to remember with all these schemes, even the good ones, the tax doesn't vanish, it is merely deferred. Hence the inevitable link to Inheritance Tax. (I seem to remember pointing that out in around 2007 and was widely ridiculed for it. Ho hum...)

[DotasScandal]

If they claim the loan is income and you pay the tax on that - how can they also say you are liable for inheritance tax?

Because they are not concerned with logic as much as following their master's directive of "maximizing the amount of tax collected"?

Think of it as a "heads I win, tails you lose" kind of proposition.

[gettingangry]

Received calculations from hmrc today for settlement. Actual sum doesn't seem so bad. Payable. Add on the interest and it gets a bit steep. Some gibberish I have no understanding of about inheritance tax and the sum becomes stupid.

What's all this inheritance tax about?

Dunno about everybody else in this position but hmrc seem to be going out of their way to make settlement impossible.

The above was the first stupid question. Now for the next.

Companies buy and sell debt. Banks, insurance, debt collectors.

What's to stop my limited company I now contract through buying my personal debt and being responsible for it or paying it?

If they claim the loan is income and you pay the tax on that - how can they also say you are liable for inheritance tax?

[Martin Scroatman]

Hmmmm....inneresting

[webberg]

Received calculations from hmrc today for settlement. Actual sum doesn't seem so bad. Payable. Add on the interest and it gets a bit steep. Some gibberish I have no understanding of about inheritance tax and the sum becomes stupid.

What's all this inheritance tax about?

Dunno about everybody else in this position but hmrc seem to be going out of their way to make settlement impossible.

The above was the first stupid question. Now for the next.

Companies buy and sell debt. Banks, insurance, debt collectors.

What's to stop my limited company I now contract through buying my personal debt and being responsible for it or paying it?

You cannot sell an obligation.

You could pay your company to take it on at a discount but that would mean you pay the company.

HMRC will take no notice of the transaction.

[ScottW]

Received calculations from hmrc today for settlement. Actual sum doesn't seem so bad. Payable. Add on the interest and it gets a bit steep. Some gibberish I have no understanding of about inheritance tax and the sum becomes stupid.

What's all this inheritance tax about?

Dunno about everybody else in this position but hmrc seem to be going out of their way to make settlement impossible.

The above was the first stupid question. Now for the next.

Companies buy and sell debt. Banks, insurance, debt collectors.

What's to stop my limited company I now contract through buying my personal debt and being responsible for it or paying it?