Declaring depreciated ccy loans - some specific questions

[webberg]

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.

We do have clients who have used the Horizon arrangements.

I will go and check if any have sent cheques for interest.

We did cover our loan charge strategy for disclosure with our clients at the seminar on 27th July.

My view of a similar scenario is that the correct value to return is the original sterling value, less the sterling value of any "repayment".

My view is the the "interest paid and readvanced" mechanism was simply a way for the end parties to collect fees. The readvance is not something that arose from the working arrangement and cannot therefore be disguised remuneration.

There is an argument that there may be sufficient connection to the original loan/remuneration for the subsequent interest to seen as related, but my view is that this is too remote.

[starstruck]

We do have clients who have used the Horizon arrangements.

I will go and check if any have sent cheques for interest.

We did cover our loan charge strategy for disclosure with our clients at the seminar on 27th July.

My view of a similar scenario is that the correct value to return is the original sterling value, less the sterling value of any "repayment".

My view is the the "interest paid and readvanced" mechanism was simply a way for the end parties to collect fees. The readvance is not something that arose from the working arrangement and cannot therefore be disguised remuneration.

There is an argument that there may be sufficient connection to the original loan/remuneration for the subsequent interest to seen as related, but my view is that this is too remote.

Super thanks

[webberg]

Super thanks

For completeness, our strategy is not without risk.

We could be wrong and penalties could arise.

If in doubt, take specific advice and do not rely upon forum users.