What is the 2019 Loan Charge?

[Iliketax]

I totally agree, it's ridiculous to impose a charge on things that happened 20 years ago. But, sadly, that's the mad HMRC world we live in now.

Btw, does anyone know what the position is on LC19 if you are non-resident in 2018/19?

Yep. But at the moment I don't know your facts and don't have time to give you an answer it in a way that will make sense to you. So here's somethings to have a look at.

Have a read of s554Z4 (residence issues) and s554Z4A (temporary non-residents) ITEPA 2003. HMRC's guidance on s554Z4 on the current DR charge is here: https://www.gov.uk/hmrc-internal-man...anual/eim45720 You can find (most of) s554Z4 here: Finance Act 2011 but some bits - which at this stage are likely to be random words to you - have since been changed by Finance Act 2013. You can find s554Z4A is FA 2013 as well (but probably won't be relevant to most contractors).

For new loans, HMRC's guidance basically says you look at what period you earned loan is for. If it is for the time you were performing UK duties then you are stuffed. There is no guidance on the April 2019 loan charge in relation to residence. Their guidance on the remittance basis says you look back at what happened to the actual loan (rather than the made up April 2019 relevant step). https://www.gov.uk/hmrc-internal-man...anual/eim47180

If they think the same (i.e. you look back at the original circumstances) then its taxable. See the example "Example: relevant step after A has emigrated" of the current DR rules I linked to.

Just to be clear (and I am taking the piss by saying that if you are not a tax adviser) the April 2019 loan charge counts as employment income and so is taxable whereever you are in the world. This is (for the very old) Schedule E without a case - see Nichols v Gibson. A DTA may be relevant, but almost certainly not for contractors.

Now it is IfartCLSO2's turn to ridicule that...

[Loan Ranger]

Just to be clear the April 2019 loan charge counts as employment income and so is taxable whereever you are in the world.

Yes but that might not be a problem if you're in a country where there is low, or no, income tax.

[phil@pmtc]

Yes but that might not be a problem if you're in a country where there is low, or no, income tax.

Its not impossible that being abroad would help the situation but as general rule its UK income so taxable as such even if non resident.

[Iliketax]

Yes but that might not be a problem if you're in a country where there is low, or no, income tax.

Er, no.

By taxable, I meant taxable in the UK.

Just to be clear the April 2019 loan charge counts as employment income and so is taxable in the UK whereever you are in the world.

For an example of that (in a different context) google the case I mentioned.

[fuhector]

So will there be a difference in the charge between voluntarily restitution and the LC2019?

I assume I would have to provide them with figures for that year and they would calculate the tax.

If these unopened years were not hit with a DA how are they aware of them? Seems to me that the carpet bombing approach of the LC2019 may not cover everyone or am I missing something? In other words how do they know of everyone’s unopened years if they didn’t raise a DA on them?

I suspect there are very few schemes, if any, that HMRC are not aware of, even from before DOTAS started, and they know the names of all your employers going back decades. They have enough info to work out whether you should be declaring loans next year and I would strongly advise against keeping quiet or playing dumb and hoping for the best.

[iheartclso2]

Yep. But at the moment I don't know your facts and don't have time to give you an answer it in a way that will make sense to you. So here's somethings to have a look at.

Have a read of s554Z4 (residence issues) and s554Z4A (temporary non-residents) ITEPA 2003. HMRC's guidance on s554Z4 on the current DR charge is here: https://www.gov.uk/hmrc-internal-man...anual/eim45720 You can find (most of) s554Z4 here: Finance Act 2011 but some bits - which at this stage are likely to be random words to you - have since been changed by Finance Act 2013. You can find s554Z4A is FA 2013 as well (but probably won't be relevant to most contractors).

For new loans, HMRC's guidance basically says you look at what period you earned loan is for. If it is for the time you were performing UK duties then you are stuffed. There is no guidance on the April 2019 loan charge in relation to residence. Their guidance on the remittance basis says you look back at what happened to the actual loan (rather than the made up April 2019 relevant step). https://www.gov.uk/hmrc-internal-man...anual/eim47180

If they think the same (i.e. you look back at the original circumstances) then its taxable. See the example "Example: relevant step after A has emigrated" of the current DR rules I linked to.

Just to be clear (and I am taking the piss by saying that if you are not a tax adviser) the April 2019 loan charge counts as employment income and so is taxable whereever you are in the world. This is (for the very old) Schedule E without a case - see Nichols v Gibson. A DTA may be relevant, but almost certainly not for contractors.

Now it is IfartCLSO2's turn to ridicule that...

Thanky ou again all cler and loud here/ I read more youre information whileI wait for for CSLO2 number.
HRMC guiandce NOT EVEn need 2019 made up revalent step 2019 HRMC just look back at orginal curmstances
tepa2003 and fiancee 2011 2013 will tax past 20 year loans made up revelant step or not/

EVEN person now live in honudras had pounds loan 1999 or 2001 and 2 is DOOMED no way out whereever you are HRMC send £££££ tax numbera to Hondrus HRMC and you to pay up. no hiding from guiadnce even guatamalaen/

TOTALLY DOOMED on past 20 years loan HRMC send you bill/ no unprotected years like kind CsLO2. even HRMC never queryed before still ALL covered by HRMC GUIADNCE/
HRMC guiandces say preforming UK duties what happened to ATCUAL loan NOT the made up revelant 2019 step9. BUT made up revelant step after A emigrated gudiance in case other not enough/ no DOUBT there all angels covred in guidance totally
ANY AND ALL loan cirumstance back 20 years ago HRMC on the ball there made up or not made up euqals tax any way

CSL02 the ONLY way out of this MESS and NO escape from HRMC guiadnce even in macu pichu hills with lamas

CSLO2 simple tell HRMC by may and numbers Stepember HRMC kindly take ONLY one tax/
no FEAR and DOUBT of made up revelant 2019 step tax stuffing twice no 2003 and 2011 and 2013 fiance act tax again no made up steps.
NO DOUBT no FEAR just CETRAINTY with CSLO2

[bluemonkey71]

Well that's an interesting read.

[Iliketax]

NO escape from lamas

Love your work.

Although, Attack of the Mutant Camels was my favourite

[LandRover]

Thanky ou again all cler and loud here/ I read more youre information whileI wait for for CSLO2 number.
HRMC guiandce NOT EVEn need 2019 made up revalent step 2019 HRMC just look back at orginal curmstances
tepa2003 and fiancee 2011 2013 will tax past 20 year loans made up revelant step or not/

EVEN person now live in honudras had pounds loan 1999 or 2001 and 2 is DOOMED no way out whereever you are HRMC send £££££ tax numbera to Hondrus HRMC and you to pay up. no hiding from guiadnce even guatamalaen/

TOTALLY DOOMED on past 20 years loan HRMC send you bill/ no unprotected years like kind CsLO2. even HRMC never queryed before still ALL covered by HRMC GUIADNCE/
HRMC guiandces say preforming UK duties what happened to ATCUAL loan NOT the made up revelant 2019 step9. BUT made up revelant step after A emigrated gudiance in case other not enough/ no DOUBT there all angels covred in guidance totally
ANY AND ALL loan cirumstance back 20 years ago HRMC on the ball there made up or not made up euqals tax any way

CSL02 the ONLY way out of this MESS and NO escape from HRMC guiadnce even in macu pichu hills with lamas

CSLO2 simple tell HRMC by may and numbers Stepember HRMC kindly take ONLY one tax/
no FEAR and DOUBT of made up revelant 2019 step tax stuffing twice no 2003 and 2011 and 2013 fiance act tax again no made up steps.
NO DOUBT no FEAR just CETRAINTY with CSLO2

Are you an HMRC employee on a bonus for pushing CLSO2?

You must be an employee of HMRC because your spelling and the way you structure your sentences makes me believe you are

[Iliketax]

Are you an HMRC employee on a bonus for pushing CLSO2?

No, it is someone who regularly posts here relieving their... tension.