Sequestration and Property

[Deleted User] · 22 April 2018 at 7:26AM

I have received a very large and unexpected bill from HMRC so I am looking at my options. Sequestration appears to be the worst case scenario but I am a home owner so I am concerned about losing my home. That said this is not my dream home, I like my flat but I never saw myself living here forever anyway.

I am not sure there is actually any equity in my home. I paid £185k several years ago and have a mortgage of £154k. The flat below mine, which is actually a bit bigger than my flat sold for £165k a year after I bought mine. The flat next door which is a lot bigger (has an extra bedroom) is on the market for £169k and has been for about a year now. Recently a flat further up the street which is about the same size as mine went on the market for £145k so I'm keeping an eye on it.

I'm going to contact Step Change to find out a bit more about sequestration but I was wondering if based on the information about it might actually be possible for me to go bankrupt and keep my home?

antonic · 22 April 2018 at 6:55PM

Sequestration is not a certainty.
Have you approached HMRC and asked for a repayment arrangement yet ?
If you have and HMRC have said no then the next step for HMRC could be the start of Summary Warrant proceedings against you - however you are a long way from being sequestrated, HMRC enforcement process`s can take time.

I have to say that sequestration could be the end result though, as you have an asset and equity in your flat.

[Deleted User] · 22 April 2018 at 8:24PM

I've engaged a tax specialist to work out exactly how much I owe. I have a ballpark figure and know it would take a few years to repay it all. I am hoping to come to an arrangement with HMRC but if HMRC don't want to play ball I want to get my ducks in a row. Expect the worst and hope for the best.

Step Change's debt remedy tool recommends a Debt Payment Plan under a Debt Arrangement Scheme which would protect my home and I think stop HMRC taking further proceedings against me. I'm hoping to speak with an advisor at Step Change tomorrow.

skintandfat · 23 April 2018 at 12:20AM

I would suggest you get a valuation from a surveyor for your home- don't go to an estate agent as they have an interest in selling. A surveyor will give you the current market value for your home

I did this before I went bankrupt and my house was in negative equity

Remember a forced sale is going to cost more and raise less than any valuation

Once the OR agrees to your home valuation (and it is in negative equity) they let you buy back your home for the legal costs £550 approx.

This is in Scotland- and they deal with your home at the start of the sequestration (whilst they have you by the short and curlies- if you do not cooperate they can go for a BRO or similar)

As long as you keep your mortgage you can still live in your home.

[Deleted User] · 23 April 2018 at 5:47AM

Thanks, that's good to know. There's a perfect storm for lower property prices where I live. My flat is very much a starter home and they are/were easily rented out so people used to hang on to them when they upsized but the higher rate of LBTT has discouraged people from doing that. Then there's the slump in oil price meaning demand for rental properties has dropped so more landlords are selling up once the current tenants leave because rents are lower making it not worth letting for some. Finally there was the introduction of the new Private Rental Tenancies in December last year so even some landlords who were still making a profit with the lower rents are trying to get out.

Hopefully though I can negotiate a payment plan with HMRC.

antonic · 23 April 2018 at 7:44AM

Lover_of_Lycra wrote: »

I've engaged a tax specialist to work out exactly how much I owe. I have a ballpark figure and know it would take a few years to repay it all. I am hoping to come to an arrangement with HMRC but if HMRC don't want to play ball I want to get my ducks in a row. Expect the worst and hope for the best.

Step Change's debt remedy tool recommends a Debt Payment Plan under a Debt Arrangement Scheme which would protect my home and I think stop HMRC taking further proceedings against me. I'm hoping to speak with an advisor at Step Change tomorrow.

Sorry to be the bearer of bad news but tax debts are not covered by debt repayment arrangements and HMRC can reject an arrangement if it will take to long to pay a debt and will continue to take enforcement action.

[Deleted User] · 23 April 2018 at 8:23AM

Thanks for the heads up.

[Deleted User] · 23 April 2018 at 1:05PM

I spoke with a lovely chap at Step Change this afternoon. He said that whilst HMRC can reject a DPP, and are the worst for doing it, they can be over ruled. As mine (if it gets that far) would be less than 5 years I stand a good chance of it being accepted.

I can unclench my buttocks a little for now.

coolcait · 24 April 2018 at 2:04AM

The chap at StepChange is right - HMRC debts can go into a DAS Debt Payment Programme.

HMRC can reject it. They can also be over ruled.

Sequestration and Property

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