Reply to: Views of deed of release - confused

[neveragain]

Has anyone paid for and signed the DOR yet?
Has it been sent back signed?

[webberg]

I have replied to the PM and it's for your use only.

[jonesi]

What's the advice on deeds of release and exclusion - does anybody know?

Hi, THL have wrapped up the portal and the notice states that up until 15 March it should be possible to get a DOR - so it looks like the window of opportunity is closing.

webberg - your view as posted early would be appreciated I have PM'd you.
Bemi - you view / position could be of help also

[jonesi]

You can PM me.

OK how do I do that?

[webberg]

webberg - do I call WTT to discuss then?

You can PM me.

[jonesi]

Bemi - though i appreciate there may be some things you can't say - do you have any comments at all on what you posted?

[jonesi]

You become a client.

It's unfortunate that this is the only way I can share my view on not only what Baker Tilly and THL are doing but the consequences that may arise.

webberg - do I call WTT to discuss then?

[webberg]

Ok, thanks - so how do I get your view? I have also asked THL about what guarantees I get that getting a DOR is the end of the matter entirely but they have not (yet) replied.

You become a client.

It's unfortunate that this is the only way I can share my view on not only what Baker Tilly and THL are doing but the consequences that may arise.

[jonesi]

What's the advice on deeds of release and exclusion - does anybody know?

Not on here.

We have briefed our clients on this situation.

Commenting on another firm's action or motivations is incredibly difficult.

I may have a view that the "service" offered by THL and Baker Tilly is both unnecessary and expensive but equally they may have a technical and legal analysis they are relying on (if so, I;ve never seen it) and they may have a large staff and overheads (again, I see no evidence of this, but it could be true).

So I can give you my view and I have spoken with "Bemi".

Ok, thanks - so how do I get your view? I have also asked THL about what guarantees I get that getting a DOR is the end of the matter entirely but they have not (yet) replied.

[webberg]

webberg - any comment on this

Not on here.

We have briefed our clients on this situation.

Commenting on another firm's action or motivations is incredibly difficult.

I may have a view that the "service" offered by THL and Baker Tilly is both unnecessary and expensive but equally they may have a technical and legal analysis they are relying on (if so, I;ve never seen it) and they may have a large staff and overheads (again, I see no evidence of this, but it could be true).

So I can give you my view and I have spoken with "Bemi".

[jonesi]

What's the advice on deeds of release and exclusion - does anybody know?

Two things for people to note:

After you request the Deeds you are send blank copies to sign and date. You have until the 15th to pay. Payment is not made to the trustees (ECS) or their masters (Baker Tilly IOM) but to another subsidy of Baker Tilly; DOR Resolutions. Unlike Baker Tilly and ECS, Dor was only set up last year. Which makes me nervous given the history of companies involved with EBTs being dissolved.

DOR DO NOT EXPLICITLY STATE THAT PAYING THEM WILL LEAD TO THE LOAN BEING WRITTEN OFF, OR EVEN THAT YOU WILL GET BACK A COPY OF THE DEEDS SIGNED BY THE TRUSTEES.

All DOR state is that:
“Once we are in receipt of the two payments, they will be processed and your signed copy documents will be returned to you for your records.”

So you get back your own signed documents... and perhaps nothing else.

While THL have promised that paying will get you the Deed of Release, and free you from the loan, THL are also the only company in this chain of Baker Tilly surrogates who are not owned by Baker Tilly. They are also, again, recently set up. This could all be coincidence or incompetence, but I would not bet that way.

And maybe if you put all the vomit of jumbled communications from THL together they don't actually promise anything that would hold up in a court of law. Just like the scheme providers' promises apparently won't.

webberg - any comment on this

[webberg]

If you have settled, then in my view, a loan write off is sensible but only you can judge whether the price being charged is reasonable.
- please could you explain why in more detail?

Because it closes this entire chapter in you life.

[jonesi]

What's the advice on deeds of release and exclusion - does anybody know?

Why?

A loan write off might avoid an anniversary charge of between 6% and 10% of the loan, but WILL trigger an income tax charge (section 554C ITEPA).

A write off pre 5th April 2019 will reduce the value of the loan charge, but the practical effect is still an addition to income in 2018/19.

However paying the write off charge is not the end of the matter (nor is paying the loan charge).

HMRC will continue to investigate the years in which loans were received, where they have already opened enquiries.

Once those are complete, it is to be hoped that the tax paid under the write off or loan charge, will be a credit against tax due in earlier years.

Every indication from HMRC is that this is the case but for me there remains some worrying gaps in the legislation. It is to be hoped that HMRC will show some common sense but given that the agency has appeared hell bent on destroying its own credibility in recent years, what do they have to lose from following a legislative path that see tax being paid twice?

If you have settled, then in my view, a loan write off is sensible but only you can judge whether the price being charged is reasonable.

If you have not settled, a loan write off is not sensible.

If you have settled, then in my view, a loan write off is sensible but only you can judge whether the price being charged is reasonable.
- please could you explain why in more detail?

[webberg]

Has anybody asked them to justify their actions in law, regulation, practice, morals?
In a round about way I have been trying to ask THL why i should seek a DOR and what could happen if I do not - not easy, they strike me as distinctly cagey - but more likely I just don't know how to ask the right questions.

webberg, what is your interest in this? are you affected?

THL are not the trustee, nor is DOR. The trustee is a wholly owned subsidiary of Baker Tilly in the IOM. Ask them, not their agents.

THL are mysterious. Normally a firm looking to collect or act as a conduit for what be several million pounds of money, has a website, officers who have a solid reputation and some experience and resources. If THL has all of this (and I don't know), it is not obvious from the public records.

My interest is professional, commercial and ethical.

I am a tax adviser. You can find me an my firm by way of a simple search of "WTT Consulting". I have been in tax a long time and have been a tax planner for big banks and a specialist tax planning firm - now defunct. I spent a few months with a firm looking to bring mis-selling claims, but left them due to professional differences. I started WTT in March 2015 with my business partner.

My firm earns fees from contractors under inquiry. We also advise Big Group which is a now substantial group of contractors who are looking to go to litigation to resolve their inquiries. We have a strategy we are following. There are no guarantees that it will work.

Ethically, I'm appalled by HMRC's arrogant disregard for the rule of law and the oversight of Parliament. Whilst such outrage is useful for maintaining motivation at times, it cuts little ice in a Court room.

We have connection and communication with a number of the professionally led and contractor led organisations in this space. We have helped such groups, but I suspect not as much as some other advisers.

Those other advisers are active here. Some are willing to share their names (Phil at DSW who I think is similar to us) and some not (Iliketax who is expert but not looking for clients).

So please bear in mind that whilst I try hard to be objective, it is inevitable that some bias may be present in what I say. You should always try to establish the bona fides of all parties you deal with in this space.

[jonesi]

What's the advice on deeds of release and exclusion - does anybody know?

Why not ask the trustee why they offer a write off?

I have no idea as to why they are doing this. I have no idea if it's to comply with trust law. Or if they consider that the tax scenario is such that a write off is sensible - it's not. Or if they simply want to make some fees.

Has anybody asked them to justify their actions in law, regulation, practice, morals?

Loans can be repaid only in line with the terms they were written on. That would include a repayment date (perhaps on demand). The lender usually has significant powers to alter terms, borrowers do not. However beneficiaries - more likely groups of beneficiaries - can influence trustees so long as they are organised.

You have confused yourself on anniversary charges. These are tax charges every 10 years. IN theory at least the trustee is obliged to self assess a charge and tell HMRC they are liable. Not a charge from trustee on beneficiary or lender.

Has anybody asked them to justify their actions in law, regulation, practice, morals?
In a round about way I have been trying to ask THL why i should seek a DOR and what could happen if I do not - not easy, they strike me as distinctly cagey - but more likely I just don't know how to ask the right questions.

webberg, what is your interest in this? are you affected?