£150k CGT arrears

[orbitsemi]

Next Jan I face a CGT bill of £150k which I cannot afford to pay. I would be able to pay at most £100k of it by remortgaging.

I will receive funds to clear the remainder approx 1.5 years later. This run up to Jan is leaving me desperately depressed.

Short of going to prison, do I have any options? I did have a quick chat to explain the situation at my local IR office but the woman at the desk just laughed.

Jim

[Bob Jones]

It is not acceptable for a member of HMRC to laugh in circumstances such as these...
You need to speak to someone in the receivables section - yours is a request for "time to pay". HMRC are bound to listen to requests such as these but, of course, HMRC will expect you to take all possible steps to raise the cash.
One thing that concerns me is that to end up with a bill of £150K the gain must have been £400K approx and the consideration substantially more than that - HMRC may very well be asking themselves what happened to the consideration from the transaction ... so they may not sympathetic to your request but that does not excuse laughter.

Bob

[Lawrence McAulay 01]

When you say you will receive funds in 1.5 years, are you referring to some or all of the proceeds of the disposal or completely unconnected money?

If the funds you refer to are deferred proceeds of the sale, let me know and I will outline section 280 of TCGA1992 for you. If not, then you will indeed simply have to negotiate time to pay.

LM

[Taxbar]

This is clearly a case for a professional adviser to negotiate on your behalf.

I would not expect HMRC to take an informal request from a taxpayer seriously.

Thats why advisers exist !!!


Daniel Feingold
STP
info@stratax.co.uk

[orbitsemi]

Can advisors do that then, can I leave communications with HMRC to my advisor and stay out of the loop?

To answer a previous Q, the added funds in 1.5 years are connected to the same share deal but seperate in that they are proceeds from re-investment. I cannot get that money any sooner.

[Instinctive]

basically, the tax office will expect you to have exhausted all avenues to raise the money to pat tax before they will agree to an instalment arrangement.

They will normally expect you to go to your bank and other lenders to borrow the money to pay tax, if necessary by giving security for the loan.

They are generally reluctant to an instalment arrangement over more than 6 months.

I think everything depends on why you have such a large gain and still not have the money to pay tax thereon, and what you did with the sale proceeds to leave you short of cash.

Ramnik

[orbitsemi]

I'm mortgaging up to the hilt in order to pay what I can, the wheels for that are already in motion. I've also arranged a 2nd mortgage (that nasty kind) to get as much as possible, but will still be between 40 and 50k short.

As for the proceeds, I'm ashamed to say they were lost on bad investments. However, the funds due to me during 2008 will be seven figs.

[al_eebee]

As other have said, get in touch with the receivables section and let them know:

1) How the position arose
2) What steps you have taken to sort out funds already
3) How you intend to clear the balance and over what timescale.

Your problem at the moment (other than the fact that you have the potential liability) will be that until such time as you have submitted the return showing the gain & HMRC have processed it, the liability will not appear on your account so you should look to get that sorted and then can approach the receivables boys

[King_Maker]

Did you take professional advice at the time?

If so, is there a good reason why there are insufficient liquid funds to pay the CGT?