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The efficacy of home loan schemes is in question. EMMA CHAMBERLAIN and CHRIS WHITEHOUSE explain why
KEY POINTS
- HMRC have changed their view on home loan schemes.
- How the scheme was structured.
- Challenge to schemes where debt payable on demand.
- Impact of the pre-owned asset charge.
- HMRC are ignoring their own guidance.
In October 2010 HMRC updated their ‘Income tax and pre-owned assets guidance section 5’ in relation to lifetime ‘double trust/home loan’ schemes by adding the following note:
‘Where the loan is only repayable at a time after the life tenant’s death HMRC is now of the view that these schemes are also caught as gifts with reservation. Further guidance including the consequences for the pre-owned assets charge will be issued shortly.’
So far no further guidance has been issued.
This statement was the first public indication that HMRC had changed their...
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