These need to be improved
The proposals to introduce a new tax charge on disguised remuneration loans and quasi-loans which were made after 5 April 1999 and remain outstanding on 5 April 2019 are penal and disproportionate.
We have published our comments in ICAEW REP 18/17 submitted in response to HMRC seeking comments on draft legislation (clause 32 and Schedule 10) proposed as part of its campaign against disguised remuneration avoidance schemes.
As noted in our earlier response to the summer consultation ICAEW REP 150/16, we consider that the measure:
Coupled with likely problems surrounding availability of records, the provision should not include loans made earlier than when the government announced its intention to take action.
Our other detailed recommendationst:
As to the close company gateway, we are concerned that, amongst the presumed unintended consequences of the new provisions, certain commercial transactions and foreign resident trusts settled by non-domiciled individuals appear to fall within the scope of the proposed changes, in which case the legislation needs to confirm that both of these situations are not caught.