Trustee will recall all loans if settlement is agreed...

[Whysoserious]

I received a rather worrying email from my trustee and wonder if anyone else has received the same or indeed what their thoughts on this statement are.

The trustees main argument arises if the settlement offer agreed with HMRC does not resolve the issue of IHT on the loans being written off.

"Consequently, should we become aware that you have settled with HMRC but not sought to have the loan written off as part of the settlement, the trustees must still consider recalling the outstanding amount in the best interests of the trust beneficiaries as a whole and to protect the position of the trustees."

So this scenario could play out:
1. Settlement is agreed and paid to HMRC on tax due on treatment of loans as income
2. After settlement with HMRC, a request is made to the Trustee to write the loans off
3. If loans are written off, this MAY trigger an IHT charge
4. On the basis that it MAY incur an IHT charge, the trustee demands full repayment of all loans to "protect themselves"

Anyone else confused?...

[phil@pmtc]

I received a rather worrying email from my trustee and wonder if anyone else has received the same or indeed what their thoughts on this statement are.

The trustees main argument arises if the settlement offer agreed with HMRC does not resolve the issue of IHT on the loans being written off.

"Consequently, should we become aware that you have settled with HMRC but not sought to have the loan written off as part of the settlement, the trustees must still consider recalling the outstanding amount in the best interests of the trust beneficiaries as a whole and to protect the position of the trustees."

So this scenario could play out:
1. Settlement is agreed and paid to HMRC on tax due on treatment of loans as income
2. After settlement with HMRC, a request is made to the Trustee to write the loans off
3. If loans are written off, this MAY trigger an IHT charge
4. On the basis that it MAY incur an IHT charge, the trustee demands full repayment of all loans to "protect themselves"

Anyone else confused?...

I would think they are saying you really need to get the loans written off once settled or else then they may have to consider options which include recalling the loan. Though obv I'm assuming so cant guarantee that is what it means

[RickG]

One of the questions on the settlement pack is:

I intend to have the loans written off within 30 days of settlement agreement

I think that means that the IHT liability will be included as part of the settlement provided you then have the loan written off by the trustees. Does that sound right?

Also, what is the IHT charge typically? I know each case probably differs but some ball park figures would be useful.

[steveb555]

Sounds like you and I are with the same outfit as I also received that email. From what I heard (verbally) the trustees have suggested they will consider writing off the loans for a fee. How generous.

I need to try to understand the motives of the trustees, specifically how calling in the loans could be in my best financial interests....?

[InNZ]

Did the Trustees try this with CLSO1?

[SlothGator]

I received an email from a company acting for an umbrella i used in 2015 saying they will release the loan from the trust and give a "deed of release" for the small fee of 5% of the loan amount + £250 admin fee.

I know someone who has over £200,000 in loans from this company/Trust.

So if you settle with HMRC - Pay the £60k in tax you owe then, you have to pay a subsequent £10,000 + £250 to the trust to release/write off the loan. Otherwise I'm sure they will try to call the loan in.

Such a great deal.

[luxCon]

Who is the trustee and who were the providers?

[Socialsarah73]

How do you find out the details of the trustees

[BankingContract0r]

Trying to search what little paperwork I have to help establish who the trustees are. In the hope that I can get a loan figure.

Some irregularities:

2012: IQ CONTRACTS of 2a Lord Street, Douglas, Isle of Man, IM99 1HP

2013: IQ Consultants Ltd in its capacity as Trustee of IQ Settlement of 2a Lord Steet, Douglas, Isle of Man, IM99 1RH (notice the different post code?)

2014: IQ Consulting (UK) Limited in its capacity as Trustee of the IQ (UK) Settlement of Warwick Mill Business Centre, Warwick Bridge, Carlisle, Cumbria, CA4 8RR.

Considering IQ don't exist any more, how would I go about getting a loan amount?


Edit: I have records to say a P11D was submitted for some if not all of the years - but I don't have the documents themselves. I understand these can be obtained from HMRC? Would this be a reliable source of the loan amount? Loathed to pay the £35 + VAT charge per document!! Previse are asking to look in archives.

[BankingContract0r]

Any help is working out how to get the loan amount (other than bank statements) would be really appreciated.