Chapter SAM110130
| Published date | 08 April 2016 |
| Record Number | SAM110130 |
| Court | HM Revenue & Customs |
| Issuer | HM Revenue & Customs |
General
2008 Finance Act changes
Differences between a nomination and an assignment
A valid assignment
What to do when you receive a deed or letter of assignment
Bankruptcy cases
A Self Assessment return and / or claim form R38 enable a taxpayer to nominate someone else to receive a repayment on their behalf. A taxpayer may also authorise by letter that a repayment is to be issued to a nominee.
Some taxpayers choose to go further than just a nomination and legally ‘assign’ a repayment by deed or letter to a nominee. A deed or letter of assignment assures the nominee that the repayment will definitely be paid to them as opposed to a nomination that can be withdrawn by the taxpayer at any time.
For example, a nominee is frequently the taxpayer’s agent and sometimes agents insist that their clients nominate them to receive a particular repayment so they can be sure of getting their fees. But because the taxpayer can withdraw their nomination, some agents are now getting their clients to legally assign a repayment to them to be certain of receiving the repayment.
Sometimes a repayment may be assigned to a loan company that lends money to a taxpayer in anticipation of them receiving a repayment.
If a deed of assignment is received and one is already in place, the original deed must be revoked before the new deed can be accepted.
2008 Finance Act changesSection 133 of the Act closes off the possibility of separating a person’s right to claim a repayment from their liability to pay their HMRC debts by assigning that right to another person. All assignments received on or after 21 July 2008 are secondary to set-off.
In effect S133 allows HMRC to make set-off of any overpayment to a taxpayer’s outstanding debts in accordance with S130 of the Act (HMRC powers to make set-off), before making payment of any remaining assigned repayment to the assignee. This ensures that an assignee cannot receive any more of a repayment than the original taxpayer would have received had the repayment not been assigned.
Also any outstanding debts owed by the assignee should be taken into account and considered for set-off before any assigned repayment is made to the assignee.
Differences between a nomination and an assignmentA taxpayer may nominate someone else to receive a repayment on their behalf by completing the appropriate authorisation on the return, form or by letter and this is known as a ‘bare’ nomination. In the case of a nomination a taxpayer remains the...
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