HMRC settlement Deadlines/delays and the LC

[TooBlue]

Has anybody here sent off their loan details to HMRC and received a settlement figure from them?

There must be people out there who are in the final stage of their settlement process.

I'm only just sending my settlement pack off to them. They provided me with loan figures which were pretty much accurate to the figures that I remember.

[TooBlue]

releasing the loans

Does anyone else managed to get the loans released? Mine were with Talent/Batchworth/Redding Capital Finance. I am looking for a way to contact them in the hope of getting them released just to put an end to this sorry saga. Could HMRC come back again and hit me with a loan charge in the future years if the loans are not released if I settle under CLSO2?
Thanks.

[hmrcvictim]

Sorry, why would the loan charge be higher? We are talking about 40% in both cases?

Sounds like your exposure is closer to 24 than 41 to me but no-one can really help with out seeing all the details. There is potentially inheritance tax to pay but that is a very grey area. Personally I would get a good tax advisor even on your amount just to ensure that you get finality.

The only danger is if you don't get a settlement in time you are potentially due for the Loan Charge which will be significantly higher. Probably closer to the 41 you mention.

If I were you I would probably settle to but please consider donating something to the LCAG JR fund to help those less fortunate :-).

[dammit chloe]

Sorry, why would the loan charge be higher? We are talking about 40% in both cases?

Not going to do an analysis as it is covered well in many posts, can't track back to what you are referring to either.

However, Loan Charge for most people will be higher because it is all counted in the same tax year so potentially more is pushed into the 40% ( 45% for many ) band than if the loans were settled in their original years.

For some the Loan Charge may be lower if they have a lot of allowance for this year left.

All depends on your own exposure and income etc. Hence why it is worth playing with the figures to see how to minimise.

[dmuk]

Curious to know HMRC current response times to settlement emails?

I sent an email to HMRC 8 weeks ago and recieved an automated acknowledgement response. Haven't heard anything since.

What's the usual turn around time? Do they send settlement details via post or email?

I guess they have until 2018/19 tax time to respond?

[TroyT]

Will the loans be written off???

Does anyone else managed to get the loans released?
Could HMRC come back again and hit me with a loan charge in the future years if the loans are not released if I settle...

Is the the same as “I intend to have the loans written off within 30 days of the settlement date” question on the settlement pack?

What does then even mean?

What are the implications of having or not having the loans written off and inheritance tax?

[webberg]

Is the the same as “I intend to have the loans written off within 30 days of the settlement date” question on the settlement pack?

What does then even mean?

What are the implications of having or not having the loans written off and inheritance tax?

If you settle with HMRC, you agree the tax position.

That does NOT remove from you the obligation to repay the loan.

The lender could (and to date a few have) requested all or some of the loan to be repaid.

There are various reasons put up for such a request which range from "proving" the payment was a loan (and therefore cannot be taxed) to blatant legal threat.

We are not convinced that the legal threat exists and certainly do not believe that repaying the loan will have any impact at all on the income tax position.

If you do take separate action to remove the threat of a repayment request (HMRC cannot do this as they are not party to the agreements you signed), then HMRC claim that in some instances, this is an event for IHT purposes. (Again, we disagree).

Therefore settlement and loan write off, generates an income tax and in some cases an IHT liability and both are included in the settlement.

[TroyT]

If you settle with HMRC, you agree the tax position.

That does NOT remove from you the obligation to repay the loan.

The lender could (and to date a few have) requested all or some of the loan to be repaid.
.

Fair enough assumption.
But, in the instance that the Structure insists that they were never loans in the first place; how could they ever ask for it to be repaid?

[piebaps]

Troy

Graham has given his professional view free of charge in the Glen May thread (which was one of the multiple threads in which you asked the same question).

Here's his words:

" Nobody works for nothing. Everybody works for payment.
Here, you worked = money arrived in your account.
If you can think of any reason why a third party would send you a gift of money or make you a loan which is not in any way connected with your work - and you can prove that to a Judge - you will not be taxed on it".

I think this just about covers it.

[webberg]

What he said.

Don't get carried away with a strict definition of "loan".

The Taxes Acts refer to "any form of credit".

Even though that also lacks a tax definition, falling back on a dictionary and common usage definition, I suggest that an ability to overdraw an account which requires repayment, is within what most people would regard as "a form of credit".

If it is not, then it's income.

The only means by which a payment may not fall within the above would be a gift (no), proceeds from disposing of an asset (no), inheritance (no), insurance proceeds (no).

After that you're into special circumstances and I see none here.