How do you get loans released - Kirium Employment Solutions and Invicta Limited?

[a5878170]

With regards to inheritance tax how do I get loans released?

I'm assuming I need proof if I tick the box.

Adding to the confusion the letter also says 'Based on the information HMRC holds in relation to the scheme you have been involved with we don not believe there are currently any inheritance charges due.

[webberg]

You do not need proof of a loan being written off or your obligations to the lender being amended.

HMRC do not ask for proof and are content to take your word for the fact of write off.

Be careful with Kirium/Invicta because the last conversation we had with the trustee did not indicate that they were prepared to write loans off.

[nobody123]

You do not need proof of a loan being written off or your obligations to the lender being amended.

HMRC do not ask for proof and are content to take your word for the fact of write off.

Be careful with Kirium/Invicta because the last conversation we had with the trustee did not indicate that they were prepared to write loans off.

Hi Webberg.

What about EIGHT TRUST?



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[webberg]

Our present view of Eight Trust is that the scheme claimed to achieve its ends by allowing users to sell an interest in an IIP trust at regular intervals.

That interest became valuable (from time to time) because money accruing to the underlying entity was placed into trust.

I offer no opinion here as to the efficacy of that arrangement in achieving its objectives.

For the purposes of this thread however, there is no loan and therefore no need for a trustee to write off or forgive a loan.

I offer no analysis here as to whether the mechanism by which the above was achieved created an enduring form of credit within the definition of the loan charge rules. I can see why HMRC might claim that and I can see a number of reasons why that might be incorrect.

Suffice to say that we are of the view that it is difficult for HMRC to claim that a loan or form of credit is subject to the loan charge.

[nobody123]

Our present view of Eight Trust is that the scheme claimed to achieve its ends by allowing users to sell an interest in an IIP trust at regular intervals.

That interest became valuable (from time to time) because money accruing to the underlying entity was placed into trust.

I offer no opinion here as to the efficacy of that arrangement in achieving its objectives.

For the purposes of this thread however, there is no loan and therefore no need for a trustee to write off or forgive a loan.

I offer no analysis here as to whether the mechanism by which the above was achieved created an enduring form of credit within the definition of the loan charge rules. I can see why HMRC might claim that and I can see a number of reasons why that might be incorrect.

Suffice to say that we are of the view that it is difficult for HMRC to claim that a loan or form of credit is subject to the loan charge.

Thank you Webberg for spending the time to reply to my question in such a way which makes sense to me.

Sent from my CLT-L09 using Contractor UK Forum mobile app

[a5878170]

This is not a good situation. All I want to do is settle.

Any advice on what to do next?

What should I do in regards to paying back loans. Will HMRC understand my position?

How do I contact Invicta or Kriuim?

[webberg]

This is not a good situation. All I want to do is settle.

Any advice on what to do next?

What should I do in regards to paying back loans. Will HMRC understand my position?

How do I contact Invicta or Kriuim?

You achieve settlement by entering a contract with HMRC. That has nothing to do with the lender/trustee et al.

HMRC claim that the last time you could initiate settlement action and be sure of achieving that prior to a (made up) deadline of 5th April 2019, was the end of September 2018. Applications to settle post that date may not be agreed prior to the (made up) deadline and mean that a loan charge assessment/statement will be issued.

It is to be hoped that if you settle and then get a loan charge assessment/statement, that HMRC will withdraw it before the payment date (31/1/20), but inexplicably, HMRC will not confirm or deny this.

Once you have settled, you can deal with the loans. Your choices are to have those loans written off or you can repay them.

A write off has no income tax tax consequence. It may attract an IHT liability but I understand that HMRC has indicated that no liability to IHT will arise on the Kirium and Invicta schemes.

A loan repayment will not make any difference to the settlement calculation. In other words, repaying the loan before or after the settlement is reached, will not reduce the income tax liability HMRC believes is due.

Repaying the loan before the 5th April 2019 will prevent the loan charge arising.

Once the loan is repaid, what then?

What do you expect to happen to the money?

If this money comes back to you, immediately or later, chances are HMRC will consider that to be an avoidance (of the loan charge) plan and ignore it and issue a loan charge assessment/statement (unless you have settled).

Even if the loan charge was removed from the equation a return of the money to you is likely to trigger a liability under the DR rules and/or a liability in money received from a distribution from a trust. Either way a taxable event.

You might therefore have three tax charges on the same money.

One via accepting that the loan was remuneration when it was paid, one via the return of a repaid loan being within the DR rules, one as a tax on the trust distribution. (Obviously if the loan charge applies as well, a fourth charge).

The legislation dealing with the first three charges contains no obvious mechanism by which tax paid on one charge can be a credit against the others with the result that you pay tax on the sum just once.

The legislation on the loan charge does have extensive rules to prevent more a charge arising on the income and the loan charge. however in our experience, the operation of those rules is a mystery to HMRC and I suspect a lot of professional time will be wasted in trying to get to a sensible and fair answer.

Simple? no.

In general, if you settle the tax, have the loan written off.

In general, do not repay loans as that can have uncertain and expensive consequences.

Get advice.

I have been on these forums for some years and hope that I have provided some help. Other advisers are here as well. However, you don't know me. I'm just a user name on a public forum. You should do some research and get some proper advice.

If you are contemplating settlement and repaying loans, then perhaps funds are not an issue for you and therefore a modest sum for professional advice would be well spent.

I have no idea what other firms charge for advice in this space, nor how (i.e. fixed or hourly rate). We charge a fixed sum, which with VAT will less than £2,000.

[wilks]

With regards to inheritance tax how do I get loans released with payments received from Kirium Employment Solutions and Invicta Limited?

I'm assuming I need proof if I tick the box.

Adding to the confusion the letter also says 'Based on the information HMRC holds in relation to the scheme you have been involved with we don not believe there are currently any inheritance charges due.

___________

Unfortunately IHT is most definitely due on Invicta and Kirium loans. The above line from HMRC is a standard line and assumes as you have not released the loans yet there is no IHT currently due. You do not need to prove to HMRC that the trust has released the loans, just tick the box and they will give you an IHT calc.

I (and several of my friends) have had the trustee release the Invicta and Kirium loans for a cost of £750+VAT per trust.
The trustee will only release the loans if you can prove you have settled with HMRC and paid IHT otherwise they believe the liability falls on them if they release the loan and you have not settled/not paid IHT.

Below is the Trustee, they are unfortunately a law firm hence the high costs, contact this guy after you have settled and paid IHT with the relevant HMRC settlement docs and one of his lackeys will contact you
Donald Simpson
| Turcan Connell

[webberg]

£750!

Very nice for having a word processor make a few changes to a few documents.

[wilks]

£750!

Very nice for having a word processor make a few changes to a few documents.

__________

Yep 5 mins to issue a deed of wavier it was take it or leave it. These guys are a very serious (Large Law firm) trustee not a fly by night and are liaising directly with HMRC on IHT matters.
I personally would not want to leave my loans outstanding with these people you would have to be mad. On the plus side my other 4 years loans were formally released for no cost.