Releasing loans - settlement

[topgazza]

So I have settled any tax, NI liabilities with HMRC in 2020. I now have the opportunity to pay the current company that "owns" the loans a percentage amount, say around 2% of the loan value. Does a tax charge under 554C apply ?

What on earth is the incentive for people to sort their affairs out if double taxation applies

[webberg]

Thanks.

My deadline to accept offer is today. I have compossed an email which is sitting in my draft box ready to be sent.

I am unable to trace one scheme provider as they are no longer in existence - also have no details referencing trusts etc.

Should I mention this on the email to HMRC?
I have been attempting to contact some one from WTT since the weekend but not had the opportunity to get any advice on this matter.

Trust assets cannot disappear. A trustee who resigns has to hand the reins on to another qualified person. If you cannot find the new trustee ask the local Regulator.

We at WTT are very busy at the moment.

The point of decision for many clients and would be clients is the end of the month. Unfortunately many individuals who are not clients have waited until now to even begin thinking about their situation and as a result our diaries are blocked with calls. If you want to PM me with contact details I can try to fit you in later in the week.

[Steve1]

Thanks.

My deadline to accept offer is today. I have compossed an email which is sitting in my draft box ready to be sent.

I am unable to trace one scheme provider as they are no longer in existence - also have no details referencing trusts etc.

Should I mention this on the email to HMRC?
I have been attempting to contact some one from WTT since the weekend but not had the opportunity to get any advice on this matter.

[webberg]

HMRC claim that if you write off a loan within 30 days of settlement, then "no further tax will arise".

This is both unsupported and perhaps unachievable in legislation (or at least none of the several HMRC line officers we have spoken with can tell us where the law is) and usually ONLY true if you tick the box to pay IHT or no IHT is due.

Aside from IHT there are a couple of income tax problems.

One is section 554C ITEPA. This is a charge on loans being written off. It is claimed by some of those seeking repayment of loans that there is an exemption available where a "commercial" lender writes a loan off. We'll see.

The other is an unspecified Part 7A charge that HMRC considers is applicable. I have had two HMRC senior officers tell me a charge could arise on a relevant step created by the write, both unable to point me to the relevant law.

In both instances, there is no "magic" in anything happening within 30 days of an extra statutory settlement and no exemption in the legislation that can be relied upon.

You are therefore dependent upon the words from HMRC creating a binding commitment that if broken can be the basis of a breach of contract claim.

Or in other words, is this HMRC using a vague but potentially big stick to force people into settlement?

A subjective call I suggest.

[Steve1]

Am I correct in thinking if the amount is less than £325k then no IHT will be due - on the 10 year anniversary ?

[Doggysoft]

Which is outrageous when you consider that some of are being held to ransom by the other 'loan holders'. Even stranger being that HMRC can't chase them for money yet they'll accept them releasing a loan?

[Steve1]

You may also want to get independent advice........transferring or writing off an outstanding loan may mean you have more tax to pay.

So what are they saying? Write off the loans within 30 days of face more tax down the line?

I spoke to HMRC and that is basically what they are saying.

[Doggysoft]

You may also want to get independent advice........transferring or writing off an outstanding loan may mean you have more tax to pay.

So what are they saying? Write off the loans within 30 days of face more tax down the line?

[panders]

I dont know what you would do in your situation with the scheme being hard to access, was there must be someone acting for them in winding things up? My contract was with a trust when operated a number of schemes...

For me I just emailed confirmation of my settlement reached with HMRC and they responded.

Maybe if you post the name of the scheme someone will have some more info?

[Steve1]

ON my settlement letter from HMRC there is a paragraph which states:

"You may want to take steps for the loans to be released within the 30 days of agreeing settlement with us. If you do, no further tax will be payable on those loans."

How can this be done?
I was part of 2 schemes.
One which is no longer running (I think!)
the 2nd... is still active but use JSOP.