Exiting Remuneration Trusts can be tricky

Exiting Remuneration Trusts raise a number of issues that need to be addressed.  Finding a tax solution (particularly one that is acceptable!) may have become easier for some with HMRC’s new Settlement Terms recently announced.

HMRC offer a new Settlement Opportunity for Remuneration Trusts

There is no doubt that tax avoidance evolved over the years.  I first came across tax schemes in the 1990’s when there were more “simple” schemes such as investments in platinum sponge and alike.  Then they progressed to Employee Benefit Trusts and Remuneration Trusts through which owners of businesses were given interest free loans

What will HMRC be sending you for Christmas this year?

For many taxpayers, a brown envelope from HMRC will not be well received at any time of the year.  Odds on it will contain bad news.  It may be the start of an investigation.  It may be a “nudge letter” or a “Check on tax position”.  It almost certainly won’t be a Christmas card!

About your offshore income and gains … … …

HMRC are pretty good at grabbing people’s attention by using such headings in their letters to taxpayers.  Such letters are often effective because their “intelligence sources” are pretty accurate.  I have seen letters in the past where HMRC have even quoted bank account numbers from the outset just to demonstrate how much detail they had at the time.  All targeting offshore income and gains.

HMRC settlement opportunity for Eclipse Film Partnership members

The Eclipse Film Partners (numbers 1 to 40) Limited Liability Partnerships (Eclipse LLPs) were complex financial arrangements and a form of tax avoidance.  Through their “investment”, taxpayers aimed to generate large interest payments on bank borrowings, presented as contributions to the capital of the Eclipse Film Partnership, so they could buy film rights.  HMRC did not accept the borrowings for the “investment” were real.

Offshore does not mean off HMRC’s radar

The fact a taxpayer has an offshore bank account or an offshore trust or offshore anything can raise or add to the concerns of HMRC.  Not so much as “what is there to hide” but more the fact that its not so transparent compared to being on the mainland UK.

Is HMRC challenging you?

HMRC holds a wealth of information on all taxpayers.  Not surprisingly though, from time to time HMRC can come across information on a taxpayer that they did not expect.  You may think that you have disclosed everything but now HMRC is challenging you and want to investigate your tax affairs.

Who is in charge of your tax investigation or is it meandering out of control?

Who is in charge of your tax investigation

So many times I hear the answer back “HMRC is in charge of course!”  Perhaps the question is more “Who should be in charge of your tax investigation”.  Either way, the answer should be firstly the adviser is in charge and secondly the taxpayer.  Otherwise your tax investigation can meander out of control.