Fiduciary receipts and search warrants Fiduciary receipts and search warrants
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  1. #1

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    Default Fiduciary receipts and search warrants

    Ashbolt & Anor v Revenue & Customs & Anor [2020] EWHC 1588 (Admin) (18 June 2020)

    The case was about whether information obtained by HMRC by use of search warrants was legally obtained and could therefore be used to advance charges of potentially unlawful behaviour in relation to a scheme devised by Baxendale-Walker LLP.

    Answer is yes.

    There are a number of special circumstances here and I recommend reading right to the end.

    Safe to say that nobody comes away without criticism.
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  2. #2

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    A verbal slap on the wrist for HMRC. Nothing will change in the way they operate.

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    I think that we need to see beyond the "verbal slap on the wrist" for HMRC and consider whether there is an HMRC policy here that can be seen - and prepared for.

    Knowing and accepting that I will be accused of scare mongering and subliminal advertising for my firm and self enrichment on the misery of others, it is nonetheless important that those who may be in scope of this demonstration of HMRC actions at least inform themselves of what may happen.

    My opinion here is that this case is a public demonstration of HMRC's intention to consider attempts to avoid the loan charge via some form of structuring, recharacterisation of transactions, relabelling of payments, or other devices as close to being (or actually) unlawful.

    Loan schemes have all been subject to (relatively) polite enquiry processes that have taken decades to advance not very far.

    Whilst one swallow does not make a summer, perhaps this case shows that HMRC is not going to be so "polite" when it comes to loan charge avoidance (or evasion).

    I would observe that the scheme in question here and the description of how enquiry responses have been claimed to have been made (not challenged by the Judge) may have played a part in HMRC going for their warrants. Perhaps a lower profile scheme may not attract such treatment?

    If you have made use of any form of loan charge structuring I recommend that you gather your papers and communications with whomever organised it and perhaps ask that organiser for their view of this case.
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    Have I read it right? The claimants Anthony Ashbolt and Simon Arundell were users of the LC scheme and it was them (not the scheme promoter) who were on the receiving end of the search warrants and criminal charges?
    Last edited by DealorNoDeal; 17th July 2020 at 10:31.
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    The facts as relayed in the decision published is that both parties were rather more than simple users of the scheme.

    I think one is described as a "sub promoter", whatever that is.
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    Quote Originally Posted by webberg View Post
    I think that we need to see beyond the "verbal slap on the wrist" for HMRC and consider whether there is an HMRC policy here that can be seen - and prepared for.

    Knowing and accepting that I will be accused of scare mongering and subliminal advertising for my firm and self enrichment on the misery of others, it is nonetheless important that those who may be in scope of this demonstration of HMRC actions at least inform themselves of what may happen.

    My opinion here is that this case is a public demonstration of HMRC's intention to consider attempts to avoid the loan charge via some form of structuring, recharacterisation of transactions, relabelling of payments, or other devices as close to being (or actually) unlawful.

    Loan schemes have all been subject to (relatively) polite enquiry processes that have taken decades to advance not very far.

    Whilst one swallow does not make a summer, perhaps this case shows that HMRC is not going to be so "polite" when it comes to loan charge avoidance (or evasion).

    I would observe that the scheme in question here and the description of how enquiry responses have been claimed to have been made (not challenged by the Judge) may have played a part in HMRC going for their warrants. Perhaps a lower profile scheme may not attract such treatment?

    If you have made use of any form of loan charge structuring I recommend that you gather your papers and communications with whomever organised it and perhaps ask that organiser for their view of this case.
    The only HMRC 'policy' people need to be aware of is, HMRC will continue to operate outside the spirit of the law, as and when they like, even if tentatively remaining within it or until reeled in by the judiciary.

    Dont confuse HMRC being defeated on a case by case basis, which is pretty rare, with Courts curtailing their actions.

    They were deemed to have operated illegally when undertaking a raid of an offshore promoter a few year back yet still operated in a similar manner in this case. And that doesnt even beginning to address the time they had access to the information they obtained and used it, from that illegal raid.

    The fact these judges let them off with a verbal slap should re inforce the facts people need to know when dealing with HMRC.

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    Quote Originally Posted by webberg View Post
    The facts as relayed in the decision published is that both parties were rather more than simple users of the scheme.

    I think one is described as a "sub promoter", whatever that is.
    Thanks, found it, "introducers or sub- promoters of the scheme"
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    And the lesson of this is...

    ...if you're going to use an LC mitigation strategy, make sure you're simple.
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    Quote Originally Posted by DealorNoDeal View Post
    Have I read it right? The claimants Anthony Ashbolt and Simon Arundell were users of the LC scheme and it was them (not the scheme promoter) who were on the receiving end of the search warrants and criminal charges?
    I had a skim through but it looks like they were users but also ‘introducers’ of the scheme. In other words snake oil salesmen. I had used this scheme as well and were introduced to it by some advisors working for a company closely related to the promotors. Tbh all these companies seem to be loosely connected..... I decided to settle with HMRC over a year ago.

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    Quote Originally Posted by Iter View Post
    I had a skim through but it looks like they were users but also ‘introducers’ of the scheme. In other words snake oil salesmen. I had used this scheme as well and were introduced to it by some advisors working for a company closely related to the promotors. Tbh all these companies seem to be loosely connected..... I decided to settle with HMRC over a year ago.
    There's a lot of that about.
    Scoots still says that Apr 2020 didn't mark the start of a new stock bull market.

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