Tax Rule 554C and Settling with Loan Company

[topgazza]

Thanks guys
As far as I know that the trust was not a discretionary one so the £325k allowance doesn't apply. But still awaiting more info. But yes tax being paid should be zero based on settlement being paid in full

[Iliketax]

If you have already paid income tax on what is economically the same amount as is being waived then double tax relief will be available. In short, you've probably satisifed the conditions for s554Z5 to apply. No idea of what your facts are, but on the face of it, it would reduce the value of the relevant step to nil.

It gets a bit geeky but HMRC explain how it works here: https://www.gov.uk/hmrc-internal-man...anual/eim46001.

[ns1]

The total loans being written off is below the 325k IHT threshold, so there's no IHT.

As far as HMRC are concerned, you've settled and that's the end of it. (They'd get crucified by MPs if they started trying to tax the loans twice.)

[eek]

I've asked the same question but it was an old thread so apologies for the duplication

I've fully settled with HMRC under the loan charge settlement scheme in 2020. Now I am in a position to settle my loans for around, 2%, figure. Loan value is around £160k so £3,200. I am confused about this 554C that I read being mentioned. Surely this is untenable when I have already paid all due taxes and NI including interest ? I can't afford to essentially pay another what , £150 K. Doesn't make any sense even in HMRCs world

If loans came from a trust you have all the issues related to trusts and inheritance tax to deal with.

That isn’t simple and the loans are above a particular thread hold so get some advice

[topgazza]

I've asked the same question but it was an old thread so apologies for the duplication

I've fully settled with HMRC under the loan charge settlement scheme in 2020. Now I am in a position to settle my loans for around, 2%, figure. Loan value is around £160k so £3,200. I am confused about this 554C that I read being mentioned. Surely this is untenable when I have already paid all due taxes and NI including interest ? I can't afford to essentially pay another what , £150 K. Doesn't make any sense even in HMRCs world