Reply to: Clso2 - anyone??

[Loan Ranger]

We've seen this several times...

If they're being unreasonable, tell them you'll go to your Member of Parliament.

This usually prompts a change of heart.

If they refuse to budge, do contact your Member of Parliament. MPs are good at making HMRC see sense.

[phil@pmtc]

Here's a good one.
Say you have to sell your home to realise a payment to HMRC within 12 months, but a TTP of say five years would allow you to keep your home.
Say that your wife is refusing to sanction the sale of the home and 'will see you in court' citing the fact that she lives there with the kids and in any divorce, she can, and will, contest that she should remain in the house until the kids are 18.

What happens then?

Then that's exactly what id set out to HMRC. I've normally convinced them to be reasonable (for them) given that sort of situation. Depressingly its pretty common to have such a conversation. Ive seen quite a lot recently where they have accepted TTP before demanding the sale of assets. Not guaranteed but probably possible (imo).

[ConfusedEasily]

The internal guidelines for accepting without full review is 12 months. However, even that isn't set in stone.

Here's a good one.
Say you have to sell your home to realise a payment to HMRC within 12 months, but a TTP of say five years would allow you to keep your home.
Say that your wife is refusing to sanction the sale of the home and 'will see you in court' citing the fact that she lives there with the kids and in any divorce, she can, and will, contest that she should remain in the house until the kids are 18.

What happens then?

[phil@pmtc]

In addition to this I'd like to know what TTP do HMRC allow without a full review of in/out assets etc - I heard that 18 months is relatively easy to get - anyone with experience?

The internal guidelines for accepting without full review is 12 months. However, even that isn't set in stone.

[Delendog]

Under CLSO2, if you need to apply for TTP, do HMRC then ask for details of all your assets etc? For example, you might not have liquid funds in time but you might need to sell a house or a car or whatever and that could take time.

Alternatively, if you just pay up on time then do HMRC not bother because I guess they have their money?

In addition to this I'd like to know what TTP do HMRC allow without a full review of in/out assets etc - I heard that 18 months is relatively easy to get - anyone with experience?

[ChimpMaster]

Under CLSO2, if you need to apply for TTP, do HMRC then ask for details of all your assets etc? For example, you might not have liquid funds in time but you might need to sell a house or a car or whatever and that could take time.

Alternatively, if you just pay up on time then do HMRC not bother because I guess they have their money?

[phil@pmtc]

If the loan is written off does the 10 yr rule apply?

As ever - many thanks.

Hi, as is often the case I'm afraid the answer is 'depends' as some form of IHT could apply whether that be 10yr or Exit.

[ConfusedEasily]

On the whole, If the trust is either S86 compliant or a super annuation scheme (trust) or if it is not from UK situs assets/property and is repaid before 10 yr anniversary then no IHT will apply. Depressingly I don’t expect HMRC to check any of this beforehand though so the message above is correct also! It will need checking in case by case basis.

If the loan is written off does the 10 yr rule apply?

As ever - many thanks.

[phil@pmtc]

On the whole, If the trust is either S86 compliant or a super annuation scheme (trust) or if it is not from UK situs assets/property and is repaid before 10 yr anniversary then no IHT will apply. Depressingly I don’t expect HMRC to check any of this beforehand though so the message above is correct also! It will need checking in case by case basis.

[ChimpMaster]

Probably worth asking in an advisor thread. My understanding is it applies to trust based loans only.

Correct

Yes, but specific types of Trusts only.

And this is where it gets confusing. Well, confusing for us, but not for HMRC who will attempt to charge IHT regardless of whether it is applicable to the Trust.

[phil@pmtc]

My understanding is it applies to trust based loans only.

Correct

[Finalwhistle]

My questions still stand:

How do you know if IHT is applicable under CLSO2?

If the loan is closed off or repaid - is it just a case of HMRC assuming IHT applies, and charging you regardless?

Probably worth asking in an advisor thread. My understanding is it applies to trust based loans only.

[ChimpMaster]

see "made atlas shrug" post on other forums. He went through CLSO and was nearly charged second IHT.

I believe his situation was that HMRC gave him a settlement figure and said "that's it, no more tax is due for you for these loans" and he agree and paid it. HMRC's IHT dept. then came along and said "oh yes, we see you closed off these loans, so you now owe us IHT".

The settlement figure didn't include IHT but given HMRC's wording on the agreement, they had promised that the settlement amount was final in terms of tax due.

So he fought back against HMRC's IHT dept and eventually they had to back down.


My questions still stand:

How do you know if IHT is applicable under CLSO2?

If the loan is closed off or repaid - is it just a case of HMRC assuming IHT applies, and charging you regardless?

[Finalwhistle]

How do you know if IHT is applicable under CLSO2?

If the loan is closed off or repaid - is it just a case of HMRC assuming IHT applies, and charging you regardless?

see "made atlas shrug" post on other forums. He went through CLSO and was nearly charged second IHT.

[ChimpMaster]

How do you know if IHT is applicable under CLSO2?

If the loan is closed off or repaid - is it just a case of HMRC assuming IHT applies, and charging you regardless?