Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what recent assessment his Department has made of the compatibility of the 2019 Loan Charge with the Rees rules on tax retrospectivity.

Sir Amyas Morse conducted an independent review of the Loan Charge. His report was published in December 2019 and the Government welcomed his finding that the Loan Charge was a justified policy to draw a line under use of disguised remuneration tax avoidance.

The Government accepted all but one of the Review’s 20 recommendations. This included a recommendation that the Loan Charge should only apply to disguised remuneration loans which were entered into after 9 December 2010, the date from which Sir Amyas considered that the law as to the tax treatment of loan schemes was clear.

The 2019 Loan Charge is not retrospective. It is a new charge on disguised remuneration loan balances outstanding at 5 April 2019 and was announced three years before the legislation took effect.

The Rees Rules have no bearing on the Loan Charge.