Cannot decide whether or not to settle Cannot decide whether or not to settle
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  1. #1

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    Default Cannot decide whether or not to settle

    Just going round in circles over this. Have had independent advice. Still can't decide.

    Received my settlement figures from HMRC. Could afford to pay. Tempted to pay to draw a line under this whole mess. The psychological relief would be worth it. Can't keep going on with the uncertainty.

    But IHT raises a question mark. I don't know what box to tick - do I say I intend to have the loans written off in 30 days or not? And what if I tick yes but then I can't get the loans written off - do I then have to inform HMRC? My trust was Redstone and I can't even find the loan agreement, I have only my bank statements.

  2. #2

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    Quote Originally Posted by MoreCandles View Post
    Just going round in circles over this. Have had independent advice. Still can't decide.

    Received my settlement figures from HMRC. Could afford to pay. Tempted to pay to draw a line under this whole mess. The psychological relief would be worth it. Can't keep going on with the uncertainty.

    But IHT raises a question mark. I don't know what box to tick - do I say I intend to have the loans written off in 30 days or not? And what if I tick yes but then I can't get the loans written off - do I then have to inform HMRC? My trust was Redstone and I can't even find the loan agreement, I have only my bank statements.
    As I understand it, if you say that you are planning to get your loans written off your details are given to the Inheritance Tax Dept who then want their share. If you don't then IHT doesn't get triggered. Yet. Who knows what is down the line. Also note that not all write-offs trigger IHT, it depends on the type of trust.

    Get some good tax advice. For this stuff I would recommend WTT. I think they know these schemes best.

  3. #3

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    Quote Originally Posted by dammit chloe View Post
    As I understand it, if you say that you are planning to get your loans written off your details are given to the Inheritance Tax Dept who then want their share. If you don't then IHT doesn't get triggered. Yet. Who knows what is down the line. Also note that not all write-offs trigger IHT, it depends on the type of trust.

    Get some good tax advice. For this stuff I would recommend WTT. I think they know these schemes best.
    I've had it. Been in BG. Never received an answer on Redstone and IHT, largely because I think no one knows what's actually happening.

  4. #4

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    Quote Originally Posted by MoreCandles View Post
    I've had it. Been in BG. Never received an answer on Redstone and IHT, largely because I think no one knows what's actually happening.
    I think that's probably true. There are so many variables in this mess which is what happens when you unpick events going back 20 years. HMRC have written to some people admitting they don't know the IHT status of particular schemes and associated loans. So if they don't know how can anyone.

    I haven't been in BG but probably will join. I know that, in general, WTT know about most schemes but don't have an "analysis" for all of them. IE they haven't found a way of using the law to exempt or minimise them.

    I'm no tax advisor but I have said I am not going to write off loans and will leave any IHT battle for another day.

  5. #5

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    HMRC gave me a settlement figure of double what I was expecting, so they've lost any chance of me settling now. In fact, the loan amounts they estimated (guessed wildly I should say) were even more than I earned in total on the contract those years.

    HMRC then mentioned that IHT was something they were unable to determine with the Trust I used. I suspect this is a standard letter they send to all of us, because really they know nothing about the Trusts and whether they are s86 or not.

    The irony is that, in a further letter, HMRC then say that it is up to me to tell them when a trigger event occurs that could cause IHT to arise on the Trust loan. So, hang on, it's your tax rule, and you want me to decide when the rule applies to me? Quite clearly this is an abuse of their position - they don't have a clue, so they put the onus on us, as well as all the risk.

    Well, technically I don't have a loan at the Trust any more any way, as it was paid off via a paper transaction many years ago. So there you have it, no clarity and no options.

    I really hope LCAG manage to get Parliament to see the truth behind HMRC - pure evil and utter spite.

  6. #6

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    Quote Originally Posted by ChimpMaster View Post
    HMRC gave me a settlement figure of double what I was expecting, so they've lost any chance of me settling now. In fact, the loan amounts they estimated (guessed wildly I should say) were even more than I earned in total on the contract those years.

    HMRC then mentioned that IHT was something they were unable to determine with the Trust I used. I suspect this is a standard letter they send to all of us, because really they know nothing about the Trusts and whether they are s86 or not.

    The irony is that, in a further letter, HMRC then say that it is up to me to tell them when a trigger event occurs that could cause IHT to arise on the Trust loan. So, hang on, it's your tax rule, and you want me to decide when the rule applies to me? Quite clearly this is an abuse of their position - they don't have a clue, so they put the onus on us, as well as all the risk.

    Well, technically I don't have a loan at the Trust any more any way, as it was paid off via a paper transaction many years ago. So there you have it, no clarity and no options.

    I really hope LCAG manage to get Parliament to see the truth behind HMRC - pure evil and utter spite.
    Could I ask what trust this is? It sounds like yours might be the same as mine (based on the comment re: paid off via paper transaction), I have the trust deeds for my earlier years but no idea how to identify if it is s86 or not (in fact I been so long trying to get IHT clarity that I've even forgotten what the implications of s86 or not are!). Have tried getting advice - I am in BG and have engaged Phil@DSW. But I have had no joy getting any answers on IHT from either.

  7. #7

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    Quote Originally Posted by starstruck View Post
    Could I ask what trust this is? It sounds like yours might be the same as mine (based on the comment re: paid off via paper transaction), I have the trust deeds for my earlier years but no idea how to identify if it is s86 or not (in fact I been so long trying to get IHT clarity that I've even forgotten what the implications of s86 or not are!). Have tried getting advice - I am in BG and have engaged Phil@DSW. But I have had no joy getting any answers on IHT from either.
    To be fair, if even HMRC struggle to give us an answer on IHT, what chance has anyone else go to decipher it?

  8. #8

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    Quote Originally Posted by Dmac View Post
    To be fair, if even HMRC struggle to give us an answer on IHT, what chance has anyone else go to decipher it?
    Surely there must be someone in the UK who can look at a trust deed and give an opinion! Can anyone recommend somebody?!! I'm willing to pay for a professional opinion.

  9. #9

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    Quote Originally Posted by ChimpMaster View Post
    HMRC gave me a settlement figure of double what I was expecting, so they've lost any chance of me settling now. In fact, the loan amounts they estimated (guessed wildly I should say) were even more than I earned in total on the contract those years.

    HMRC then mentioned that IHT was something they were unable to determine with the Trust I used. I suspect this is a standard letter they send to all of us, because really they know nothing about the Trusts and whether they are s86 or not.

    The irony is that, in a further letter, HMRC then say that it is up to me to tell them when a trigger event occurs that could cause IHT to arise on the Trust loan. So, hang on, it's your tax rule, and you want me to decide when the rule applies to me? Quite clearly this is an abuse of their position - they don't have a clue, so they put the onus on us, as well as all the risk.

    Well, technically I don't have a loan at the Trust any more any way, as it was paid off via a paper transaction many years ago. So there you have it, no clarity and no options.

    I really hope LCAG manage to get Parliament to see the truth behind HMRC - pure evil and utter spite.

    How did this happen? did you supply loan figures and they ignored them and pluck new ones from thin air?

  10. #10

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    Quote Originally Posted by passerby View Post
    How did this happen? did you supply loan figures and they ignored them and pluck new ones from thin air?
    No my loans are > 10 years old so I have sparse information on them. All years are closed i.e. no open enquiry.

    HMRC know my salary from that time because they have the tax return data. So they should also have the BIK data and I thought would have been able to use that to calculate the loan amounts. But instead they took the lazy and harsh option of just multiplying my salary by a random 6x multiplier, and telling me that was the loan amount they were going to tax me on. Those loan amounts are more than I earned on the whole contract for each of my tax years!

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