Originally posted by lowpaidworker
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At present there are perhaps two arguments HMRC has advanced in two separate places and upon which they may in due course place some reliance.
First, the loan charge legislation discusses "quasi loans". In essence this is a catch all phrase which could be taken to mean a loan that replaces another loan.
In most direct loan schemes the claim is that a loan from the employer is outside the definition in section 554A (1)(d). I think this is true.
If nothing else was done and the employer was still around and still held the loans, then I would say that prima facie, you had a great chance of avoiding the loan charge.
Almost inevitably however the loan made by the employer was moved on at some point (just before a company/tax year end normally) and the loan is now held by a third party. Perhaps a trust.
Is it now within the rules in 554A (1)(d) and/or quasi loan rules in Sch 11 F(No2)A 2017?
I would say that there is a very good chance that HMRC think so and a case to argue if you don't think so.
Further, there is a GAAR opinion from October 2018 in which a scheme which has the switch of loans from original lender to third party involved. HMRC persuaded the GAAR Panel (and no evidence was produced from the taxpayer side to refute it) that Parliament had intended that the situation should be caught within the rules of Part 7a, despite specifically not saying so, and therefore he rules could apply.
Now this is i think a long stretch for a Tribunal to make and I'd be surprised if - upon challenge - it would stand up. Unfortunately a GAAR opinion means that if you go to Court and lose, high penalties are automatically applied. So who will risk that?
The above is why I think HMRC hold the view they do.
Perhaps they have other grounds, but if so, they have not told me about them.
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