Sarah Bradford outlines the disguised remuneration loan charge and what can be done to avoid it crystallising.
On 5 April 2019, a tax charge will apply to all outstanding disguised remuneration loans made since 6 April 1999 unless the taxpayer has reached a settlement with HMRC by that date.
The loan charge
The loan charge, often referred to as the ‘2019 loan charge’, was announced at the time of Budget 2016, with the necessary legislation introduced by F(No. 2)A 2017, s 34 and Sch 11. It is an anti-avoidance measure. It seeks to circumvent the avoidance of tax and National Insurance contributions (NICs) through the use of disguised remuneration schemes. The charge supplements the anti-avoidance legislation on disguised remuneration schemes contained in ITEPA 2003, Pt 7A.
HMRC estimate that the
