Readers’ forum: Loan nightmare

I act for several clients who have used various employee benefit trust/contractor loan schemes promoted by third parties. These have not been settled and the clients are awaiting the outcome of the loan charge review before deciding what to do next.

I am hearing anecdotally that some trustees are contemplating seeking repayment of the loans or even selling off their loan books to third parties at a heavily discounted value. Those third parties will presumably then seek repayment of the loans.

What concerns me is that some clients could be left in the nightmare position in which they have to repay the entirety of the loans and also pay tax under the loan charge if it is upheld by the review.

If the loan is repaid the trustees would presumably be under no obligation to distribute funds back to my clients. And if the loan book has been...