Loans write off and APNs

[Iliketax]

It may count as employment income under UK law but does it automatically follow that it is taxable?

Normally, a DTA a would override domestic legislation.

What if there was a DTA that (under certain narrow conditions) assigned sole rights to tax employment income to the other country for the year in which that income arises?

Awesome. But that is not what most DTAs say.

[Ozbird]

They won't let me settle. They sent me a letter saying that I could settle but by the time it reached me her in Oz the deadline had already passed. I emailed them and they said that I cannot now settle. I don't know what else to do. I am so sick of this hanging over me and the possibility that the trust could sell the loans and someone come after me for the loan amount. After the offer to settle expired I emailed them and made an offer to settle for an amount of money and asked them if I could even settle the closed year but they just wrote back to say that I should do my tax return and pay the loan charge. I had already done my tax return and the loan charge doesn't apply as its pre 2010. If I have to speak to these guys I am not even sure they are empowered to have these negotiations about offsetting the APN and closing the open enquiry. Its such a mess.

[GoneSurfing]

Awesome. But that is not what most DTAs say.

Ozbird would appear to be resident in Australia and a quick scan of the UK/Australia DTA reveals:

14.2 Notwithstanding the provisions of paragraph 1 of this Article, remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable *only* in the first-mentioned State if:

(a) the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in any twelve month period commencing or ending *in the fiscal year or year of income* of that other State; and

(b) the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State; and

(c) the remuneration is not deductible in determining taxable profits of a permanent establishment which the employer has in the other State.


Possibly "awesome" for Ozbird then?

[DealorNoDeal]

They won't let me settle. They sent me a letter saying that I could settle but by the time it reached me her in Oz the deadline had already passed. I emailed them and they said that I cannot now settle. I don't know what else to do. I am so sick of this hanging over me and the possibility that the trust could sell the loans and someone come after me for the loan amount. After the offer to settle expired I emailed them and made an offer to settle for an amount of money and asked them if I could even settle the closed year but they just wrote back to say that I should do my tax return and pay the loan charge. I had already done my tax return and the loan charge doesn't apply as its pre 2010. If I have to speak to these guys I am not even sure they are empowered to have these negotiations about offsetting the APN and closing the open enquiry. Its such a mess.

The people you are dealing with are clearly totally focused on the loan charge. You may be the only person who has contacted them about pre-2010 loans which fall outside the "settle by X date or pay the LC" script.

If you want to settle the open enquiry, you need to find someone who can deal with pre-2010 loan years.

I would suggest contacting the team who opened the original enquiry but they may not still be around.

Maybe someone else here can point you in the right direction?

[regron]

HMRC are set to detail the new settlement opportunity for pre-2010 years this Autumn.

[webberg]

There is an active group in Australia which is looking at all aspects of the situation.

Happy to effect an introduction if you want to PM me.

[regron]

HMRC are set to detail the new settlement opportunity for pre-2010 years this Autumn.

Apologies, I was out and abut this morning when I posted this, and need to correct the above now I've dug out the information.

1. DR loans not subject to the Loan Charge can be settled based on the August 2020 settlement terms (link provided in the link below).
2. Settlement terms for DR loans which are subject to the Loan Charge, will be published later this year (link below).

Disguised remuneration: settling your tax affairs - GOV.UK

[Iliketax]

Possibly "awesome" for Ozbird then?

Or possibly not. Ozbird will have to think about the "(c)" bit and that will be a question of fact.

For example, the employer may have already claimed a deduction or the waiver will trigger a deduction (s1292(6A) CTA 2009).

[Ozbird]

Or possibly not. Ozbird will have to think about the "(c)" bit and that will be a question of fact.

For example, the employer may have already claimed a deduction or the waiver will trigger a deduction (s1292(6A) CTA 2009).

How can I find that out? The employer was Edge Consulting and they no longer exist.

Also, tax in Oz would probably be more tbh because I am earning money from work here. I don't mind not getting my APN back as long as it offsets the amount of tax I would owe. If I had settled I would have paid way more because of all the interest.

[DealorNoDeal]

I don't mind not getting my APN back as long as it offsets the amount of tax I would owe. If I had settled I would have paid way more because of all the interest.

Unfortunately, I can't see HMRC agreeing to close that open enquiry unless you settle.

I assume you are aware that no additional interest will have accrued since you paid the APN.