Reply to: “ I owe £180,000 in tax and I haven’t told my wife”

[Zigenare]

And there's the possibility of IHT to consider.

Great news for a widow to read from her doormat mail I would imagine.

Or Widower. #JustSaying

[cojak]

And there's the possibility of IHT to consider.

Great news for a widow to read from her doormat mail I would imagine.

[eek]

I think point 1) is pretty simple, in that any loan that is cancelled or forgiven is treated as taxable income at that moment. Quite how anyone thought they would get away with this sort of scheme is beyond me. HMRC don't really need to prove any sort of intent to claw to the money back on that basis alone.

I too am curious about point 2). I sat next to someone back in 2001 who went for one of these schemes - from (faded) memory it was involved something truly bonkers like a pineapple farm in the Bahamas, but I might be embellishing that. I told him at the time that I thought he was mad, and I did wonder how you could both set up a legally realistic looking loan without also having the real risk that your creditor could eventually come looking for the money back. Does anyone know if this has actually happened to anyone since then? The person I sat next to was on a good rate, for a fair few years, and also an extremely profligate spender. I haven't kept in touch but I do wonder if he got caught out by it in the end.

Nope - HMRC will treat a loan as if it was income and expect the appropriate tax to be paid as to all intents and purposes it is income. See https://www.contractoruk.com/forums/...-entities.html for an overview of a recent case.

If the loan is forgiven or written off it's possible that inheritance tax may be due if the "loan" came from a trust.

As for point 2 - see https://www.contractoruk.com/forums/...s-summary.html one of the risks of getting the loan shifted overseas is that they may fail to actually do so legally (see all the Bestpay examples) and the other one is that the loan ends up returning back to the IoM later (see Fecilitas).

[fullyautomatix]

from posts in the hmrc forum (2) looks like its really happening which caused me to raise my eyebrows. Shocking but apparently true fine and legal

fog
folpm1
fonpouk

[NowPermOutsideUK]

From posts in the HMRC forum (2) looks like its really happening which caused me to raise my eyebrows. SHocking but apparently true fine and legal

[mattster]

I know this is general so forgive me for asking but having read the hmrc forums can I just make sure I understand in a nutshell what happened to people who took out loans as disguised renumeration

1) hmrc are rolling up all the loans and taxing them in one year - ok that I understand and expected from the loan scheme

2) more worryingly liquidators are now chasing the contractors and asking for the loans to be repaid

Is this the way the cookie crumbles with the contractor get shafted by both hmrc and liquidator or a bogus loan?

Like I said I did not do this loan scheme but if (2) is true then this is really nuts

I think point 1) is pretty simple, in that any loan that is cancelled or forgiven is treated as taxable income at that moment. Quite how anyone thought they would get away with this sort of scheme is beyond me. HMRC don't really need to prove any sort of intent to claw to the money back on that basis alone.

I too am curious about point 2). I sat next to someone back in 2001 who went for one of these schemes - from (faded) memory it was involved something truly bonkers like a pineapple farm in the Bahamas, but I might be embellishing that. I told him at the time that I thought he was mad, and I did wonder how you could both set up a legally realistic looking loan without also having the real risk that your creditor could eventually come looking for the money back. Does anyone know if this has actually happened to anyone since then? The person I sat next to was on a good rate, for a fair few years, and also an extremely profligate spender. I haven't kept in touch but I do wonder if he got caught out by it in the end.

[eek]

Over 6 years?

That was merely based on that post - but you beat me given that post is before I joined this site with this username.

[cojak]

Over 6 years?

If the loans are "safe" doesn't that mean that one sunny day your 'employer' can demand that you repay the loan?

Just a thought...

[eek]

Ah...The fragrant Venables QC...

https://www.contractoruk.com/forums/...ml#post1951367

Thanks for that - I forgot about Garraway getting my details from Jobserve by misrepresentation..

It's also scary to see that I've been complaining about (and posting about schemes for over 6 years). And they still haven't gone away (although some have got stupider).

[cojak]

Oh that's one I can answer without trying. Pound for a penny it will be Robert "I heartly approve of (the lunch) this scheme (has paid for)" Venables QC

Ah...The fragrant Venables QC...

https://www.contractoruk.com/forums/...ml#post1951367

[eek]

How many know the name of the QC providing the opinion?

Oh that's one I can answer without trying. Pound for a penny it will be Robert "I heartly approve of (the lunch) this scheme (has paid for)" Venables QC

[Paralytic]

How many know the name of the QC providing the opinion?

Or asked.

[NotAllThere]

How many people ask to see the QC "approval"? How many actually read it?

How many questioned whether a QC providing an opinion they were paid for might not be thinking for the benefit of contractors who signed up to the schemes? How many questioned whether that "approval" actually meant anything in the grand scheme of things?

How many know the name of the QC providing the opinion?

[Paralytic]

Under my tyrannical administration these people will be sharing a cell with that QC.

And you could sell the rights for a reality TV show.

[AtW]

How many people ask to see the QC "approval"? How many actually read it?

How many questioned whether a QC providing an opinion they were paid for might not be thinking for the benefit of contractors who signed up to the schemes? How many questioned whether that "approval" actually meant anything in the grand scheme of things?

Under my tyrannical administration these people will be sharing a cell with that QC.