HMRC has added spotlight 48 to the list of tax avoidance schemes it is actively investigating. This makes clear that HMRC will not demand a deed of release or exclusion in respect of IHT before agreeing a contractor loan charge settlement.
However, HMRC may accept a payment made to an adviser for such a deed as reducing the outstanding loan balance in specific circumstances. This could be where the payment:
represents a genuine repayment of the loan; and
is paid in cash.
HMRC says that any flat fee paid is unlikely to be deductible in reaching the settlement amount due.
The IHT wording of HMRC’s settlement pack has been changed accordingly. This now reads:
‘I wish to have IHT included in the settlement on the basis of the loans being written off or released within 30 days of a settlement being agreed. No further evidence will be required by HMRC of this. If the loans are not written off or released within 30 days of a settlement being agreed, I will contact HMRC so that the IHT position can be reviewed.’
HMRC has added spotlight 48 to the list of tax avoidance schemes it is actively investigating. This makes clear that HMRC will not demand a deed of release or exclusion in respect of IHT before agreeing a contractor loan charge settlement.
However, HMRC may accept a payment made to an adviser for such a deed as reducing the outstanding loan balance in specific circumstances. This could be where the payment:
represents a genuine repayment of the loan; and
is paid in cash.
HMRC says that any flat fee paid is unlikely to be deductible in reaching the settlement amount due.
The IHT wording of HMRC’s settlement pack has been changed accordingly. This now reads:
‘I wish to have IHT included in the settlement on the basis of the loans being written off or released within 30 days of a settlement being agreed. No further evidence will be required by HMRC of this. If the loans are not written off or released within 30 days of a settlement being agreed, I will contact HMRC so that the IHT position can be reviewed.’
