Hello Kr1979 and welcome.

I guess if you disagree with the HMRC figure you could challenge it, though I'm not sure how much that might help you. It might if they've got it totally wrong and you can prove this.

If you go for sequestration your affairs will be analysed again. If its deemed that you can afford a contribution towards the debts you'll have to pay it for three years. So it would seem you're facing a further three years either way.

You have no option of sequestration unless you are first discharged from your trust deed.

I cannot see how you and your wife can financially disassociate yourselves from each other with the credit reference agencies. As you have a joint mortgage your financial affairs appear to be clearly interlinked.

Is there a time limit as to company's getting in touch as it is nearly three years

Is there a time limit as to company's getting in touch as it is nearly three years

Which company do you mean Kr1979?

Is the figure meant to read £78,000?? Thats a big bill!!

Paul

If HMRC's claim relates to the pre sequestration period then they are of course more than entitled to claim in the sequestration. It depends whether their debt is preferential or non preferential as to how they will rank for dividend. It is likely they have no preference.

I find it strange to understand that The trustee is looking to extend or sequestrate. The Trustee usually writes to HMRC at the outset out of procedure so they should have been aware of the trust deed. An unexpected claim of that level at that stage no doubt has a massive effect on the dividend to creditors, to the detriment of your other creditors.

The question has to be however, who's at fault? HMRC for submitting their claim so late, The Trustee for not looking in to HMRC's claim earlier, or perhaps you did not properly advise your Trustee at the outset and they are punishing you by looking for an extension?

There are so many different answers here it all depends on circumstances. The Trustee may feel the best thing to do is to sequestrate given the level of debt in order to let the claim be dealt with fairly. The fact it prejudices other creditors so much and should have been included in the original proposal, which would probably have rendered the Trust an unsuitable option at the time.

Surely the first thing to do is to check HMRC's calculations, and challenge the alleged level of debt, if appropriate?

Especially if Kr only expected the tax bill to be in the region of a couple of thousand pounds.

If (apologies to Kr for thinking out loud) the tax bill is as a result of fraud, then the debt wouldn't be written off by the TD, or sequestration. Presumably the trustee has checked that fraud is not an issue in this case...

Finally, all creditors accept or reject a TD proposal on the basis of an estimated dividend. They are sent a claim form with all of the other paperwork to do with the TD proposal.

So there is always the risk that some, or all, of the creditors may put in a claim at a higher level than the amount in the proposal. Which will probably reduce the dividend to all creditors.

If the trustee was aware that HMRC were "looking into" Kr's tax affairs, surely that's a huge red flag that the debt to HMRC was probably/inevitably going to go up - and all the other creditors should have been advised about this at the beginning?

If the change wasn't foreseeable, why should Kr be penalised?

This one's bugging me [:I] Sorry![:)]

What if the complication wasn't due to an HMRC debt?

Let's say that Kr had a property in negative equity. And he'd paid an agreed 500 quid into the TD, so the trustee had no further interest in that property.

But then the secured lender called up the security, sold the property at a shortfall, and the shortfall went into the TD - to the detriment of other creditors.

what would happen then?

Hi Kr1979

The trustees comments to extend or sequestrated are nonsense. I would love to see what on what grounds the trustee would petition.

There are 2 key points here. Firstly the trustee appears to be suggesting that she cannot finalise as there will be a variation to the dividend to creditors agreed at the start. Garbage. I assume therefore if the trustees fees were greater than anticipated at the end or the estimated debts are the start were greater, therefore affecting the dividend, then they would apply the same rules?

Tell your trustee to have a look at the trust deed document itself under 'Termination of Trust Deed' There are 3 sections in the standard document. Point them towards the section on payment of a final dividend which will include a NIL dividend to creditors. This is the part which allows them to finalise.

If your trustee tries to follow this nonsense argument of extension or sequestration, then I assume the Trustee has paid creditors exactly the dividend which was agreed at the start for every case they have ever dealt with. If not, their thinking falls.

Mark

Is your trustee arguing that you have misled them somehow by purposefully understating how much the tax bill was likely to come to? If so then they could have a stronger argument to make in a sequestration hearing - though they'd really need to be able to back this up.