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Original poster

Does anyone know the implications of this "loan"?

23 replies

ThisModernLove · 17/03/2023 14:21

Am getting a divorce. Ex-dh works for his family business. He says he is just an employee and owns no shares etc. The family business apparently "loaned" him 200k around 10 years ago and this now needs to be repaid.

There is no loan agreement and I have the company accounts and the loan is not stated in there (loans to his dad and brother are). I have the names of the significant debtors and he is not listed.

We are in court next month - will a judge realistically take 200k out of the house equity to repay this?

OP posts:
Original poster
ThisModernLove · 17/03/2023 14:21

Its the FDR next month. Obviously I'm getting legal advice and am waiting to hear back from my solicitor, just wondered if anyone had any knowledge of this

OP posts:
strawberry2017 · 17/03/2023 14:52

Well isn't that convenient, and after all this time it now needs repaying!
No idea what will happen but that sounds shady! Surely they would have to provide evidence of this?

wildseas · 17/03/2023 14:57

Hopefully he’ll be laughed out of court.

However on the slightest off chance that he isn’t it is probably worth getting a copy of everything and forwarding it on to hmrc.

A significant loan to a family member that isn’t being accounted for on the books is the sort of tax fraud they’d like a look at…..

Original poster
ThisModernLove · 17/03/2023 15:09

It does seem rather convenient doesn't it... I'm baffled to be honest - his solicitor is writing as if there is no issue with this at all?! He's given a letter from his accountant saying that he owes the money - but then why isn't it on the accounts? Why would a company lend "just" an employee 200k with no repayment agreement?! All else he's given as evidence is an excel spreadsheet with some transactions on it that he made himself!

We've asked for details of the s441 tax that would be payable on it but they've declined to provide it.... they say hmrc are "aware"

OP posts:
Stropalotopus83 · 17/03/2023 15:09

He will need to prove it - he will need to show bank statements showing he received the funds and yes, if it is a loan then he will need to provide a copy of the loan agreement showing the terms plus you can request copies of the company accounts which detail said loan.

Given you have seen the accounts and it isn't on there then he's likely trying to pull a fast one. You have a solicitor so they will know what to do and both they and the judge will have seen hundreds of variations of this situation.

Sounds like he is trying his luck tbh. Your solicitor will sort it if that's the case x

Original poster
ThisModernLove · 17/03/2023 15:21

No bank statements - money transferred straight out of company accounts. Never hit a bank account of his apparently

OP posts:
MumOf2workOptions · 17/03/2023 15:25

This reply has been withdrawn

This message has been withdrawn at the poster's request

Original poster
ThisModernLove · 17/03/2023 15:36

oh also - despite hmrc being "aware" it is not listed on his p11d either?!

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TempNCforthis · 17/03/2023 15:40

Were you two together 10 years ago? Married? What is he saying he spent it on? It's a huge amount of money to be lent. He hasn't repaid a penny of it, is that right?

It sounds like an out and out lie. I wonder whether he says it was 10 years ago because financial records only have to be kept for seven years.

Bank accounts do go back further than that, though.

Bet you are glad you are divorcing this piece of work.

drpet49 · 17/03/2023 15:41

I would make HMRC aware.

MrsPnut · 17/03/2023 15:53

If the business had made a loan to him, even though it was 10 years ago it would still be recognised in the accounts every year in the same way the loans to his other family members are.
Companies house and HMRC would be asking questions if the company had no records of £200k unless they are so vast that it is immaterial.

FrangipaniBlue · 17/03/2023 18:06

ThisModernLove · 17/03/2023 15:21

No bank statements - money transferred straight out of company accounts. Never hit a bank account of his apparently

So the gave him cash? In which case there will be a £200k cash withdrawal on the company accounts?

If it was "transferred" then where to if not his bank account?

AnneElliott · 17/03/2023 18:34

This does sound odd. We used to have a Ltd comp which had had a loan from the funds, but it had to be reported in the accounts and of corde the evidence was there on the comps h bank account t and ours. Where did the company send it? Surely they're not suggesting he got a career bag with £200k inside?

123ZYX · 17/03/2023 18:50

It sounds like you're doing all the right things.

Just to add to the other advice - if you have evidence that the accountant has lied, id report them to their professional body (ACCA/ ICAEW) with as much evidence as possible.

An email to the accountant setting out the evidence you have and a hint that you'll be reporting them might be enough to get them to withdraw their letter

Original poster
ThisModernLove · 17/03/2023 22:05

It seems to have been spent on different things - the excel spreadsheet has various transactions that apparently make it up. We were together 10 years ago. Have been together 16 ish years

Some in cash to his bank account (post split), our kids school fees, some house renovations etc. I thought these were coming from other places - his bonus, gifts from his dad, a trust that paid the school fees. I didn’t think it was a loan?

i don’t see how the accountant has written that either because where is the evidence it exists? If it isn’t in the accounts why are they paying tax on it as they say they are? It just doesn’t make sense.

he started off saying it was a directors loan. Then it emerged he wasn’t a director of the company he owes it too, his solicitor says that’s “just semantics”

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Original poster
ThisModernLove · 17/03/2023 22:06

Ie they paid those things directly- transfer from company bank account to the schools, to the builder etc

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Original poster
ThisModernLove · 17/03/2023 22:11

Of course there’s tonnes of other shady stuff going on - this isn’t everything!

His income has “just happened” to reduce by 30% and unfortunately the children were taken off the family trust that had paid all their school fees (and every other family childs school fees) for “tax reasons” meaning they had to leave their private school…. So this is just another thing really

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greenspaces4peace · 17/03/2023 22:13

i was going to ask if a trust was involved.
it may not be as shady a practice as you think.

TheFormidableMrsC · 17/03/2023 22:33

He's going to have to prove this. He can't just say it. I had so much shady business related stuff with my ex, it got him absolutely nowhere. He is being very badly advised IMO 🤷🏻‍♀️

Original poster
ThisModernLove · 18/03/2023 11:20

That’s interesting @greenspaces4peace - why do you say that?

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Mumof3confused · 19/03/2023 09:02

Is there any evidence that he’s been paying back any of this over the years, via dividend?

Mumof3confused · 19/03/2023 09:05

Re his solicitor, if I have learned anything through my own divorce, it’s that what his solicitor can write any garbage they are asked to write but it’s worthless and not worth spending time and energy thinking about or responding to via your own. Save your money for court proceedings. He will need to prove his claims there and the judge should be reasonable and see through any lies.

Collaborate · 19/03/2023 14:09

I ama a family solicitor and had a case recently with similar issues. The judge found that the other party had failed to prove the existence of their alleged debt so could not rely on it.

You speak of shares so it must be a limited company. If he's been loaned £200k from his family company then there will be interest to pay, or alternatively he will have paid tax on it as a benefit in kind. I bet thsat there;s none of that.

But you have a lawyer. Listen to them. Don't second guess them on a public message board.

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