Declaring depreciated ccy loans - some specific questions

[starstruck]

No. Mine admitted that due to depreciation they were waived/paid off but HMRC rules require reporting in the original , sterling, loaned amount. Hence that is the loan value.

Actually you are correct in that the trust did tell me that the original amounts would need declaring and they gave me those; there was no mention of interest payments, but they didn't keep records going all the way back so only some loans included.

It's annoying as the interest payments came out of non DR income so by EBT lending back and then having LC applied to that amount, I'm being taxed on that money twice! Once when I got it and again by the LC.

But there is a £3000 fine for incorrect reporting I think and so it's quite a big risk to not declare all loans totally honestly.

EDIT - Is there an argument for declaring just the DR loans and ignoring the interest payment loans?

[dammit chloe]

Actually you are correct in that the trust did tell me that the original amounts would need declaring and they gave me those; there was no mention of interest payments, but they didn't keep records going all the way back so only some loans included.

It's annoying as the interest payments came out of non DR income so by EBT lending back and then having LC applied to that amount, I'm being taxed on that money twice! Once when I got it and again by the LC.

But there is a £3000 fine for incorrect reporting I think and so it's quite a big risk to not declare all loans totally honestly.

EDIT - Is there an argument for declaring just the DR loans and ignoring the interest payment loans?

I simply wouldn't go there. If the trust tells you the amount then that is the amount. Webberg is suggesting that all this was quite possibly a paper exercise in which case they are not real transactions. IMV you are over analysing.

If the transactions are not real then, IMV, you are a victim of fraud.

[webberg]

Be careful about the motives of the lender in claiming that a piece of tax legislation permitted, perhaps forced, them to reinstate loans.

I'm not a lawyer but to the best of my knowledge, a loan is subject to contract law and once certain actions have taken place, in order for them to be reversed, you need to base the reasons on contract law.

Tax law applies to tax situations and generally do not influence directly commercial or contract law scenarios.

[starstruck]

Hmmm, looking again at my docs for one scheme I paid an interest cheque to the trustees and got a further loan back of most of the interest but for another scheme the main loan had interest deducted and then a further drawdown (part of the interest) added. So I never wrote them a cheque; it was a paper exercise.

[starstruck]

Be careful about the motives of the lender in claiming that a piece of tax legislation permitted, perhaps forced, them to reinstate loans.

I'm not a lawyer but to the best of my knowledge, a loan is subject to contract law and once certain actions have taken place, in order for them to be reversed, you need to base the reasons on contract law.

Tax law applies to tax situations and generally do not influence directly commercial or contract law scenarios.

You're talking about Venturis sending loan statements; I personally disagree they are "reinstating" the loans, I think they are just saying what needs to be declared for the LC. But that is a side issue not related to my question.

So how are you treating Horizon interest payments (and further drawdowns) when settling/declaring LC for your clients; you say you've never seen these interest payments, but you must have if you have Horizon clients, which I know you do.

[dammit chloe]

Be careful about the motives of the lender in claiming that a piece of tax legislation permitted, perhaps forced, them to reinstate loans.

I'm not a lawyer but to the best of my knowledge, a loan is subject to contract law and once certain actions have taken place, in order for them to be reversed, you need to base the reasons on contract law.

Tax law applies to tax situations and generally do not influence directly commercial or contract law scenarios.

I am very wary Webberg. In fact I questioned the man from the adventurous trust with a welsh sounding name to point me at the specific legislation and he simply gave my a link to the loan charge legislation not the key parts. I am not savvy enough to interpret it all that.

I have questioned the very fact of them not actually being outstanding from the very start if the contract is the contract.

I came very close to simply not getting involved/declaring anything, as one of your colleagues advised, but I am in a very precarious position financially and mentally so a long drawn out battle would probably end me one way or the other.

It keeps coming back to the Loan Charge being primary legislation and having provisions for this scenario supposedly. I have no inkling how any court would approach this from either a tax or a contract perspective. The Loan Charge, in intent, seems designed to simply brute force everything and everyone into submission.

[stonehenge]

Actually you are correct in that the trust did tell me that the original amounts would need declaring and they gave me those...

If the trust has given you figures for the loans, why not just use them?

[starstruck]

If the trust has given you figures for the loans, why not just use them?

Because they don't include the interest payment draw-downs and I don't want a £3k fine!

[dammit chloe]

If the trust has given you figures for the loans, why not just use them?

IKR. enough problems without looking for more.

[stonehenge]

Because they don't include the interest payment draw-downs and I don't want a £3k fine!

If you've requested the loan amounts from the trust, and they've provided this in writing, then surely that should cover you?