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HMRC internal manual

Employment Income Manual

Para 1(3): loan charge relevant step: interaction with Pt 7A gateway provisions

Schedule 11 F(No 2)A 2017 and section 554A(1)(e)(i) and (ii)

The loan charge relevant step will be treated as taken at the end of 5 April 2019 or on the approved repayment date for approved fixed term loans.

There will also have been relevant steps taken prior to the loan charge relevant step in relation to the making of the loan or quasi-loan.

There is a separation between the loan charge relevant step and the relevant step taken under the arrangements which resulted in the loan or quasi-loan being made.

Any references to relevant steps in sections 554A(1)(e) are to the steps taken in making the loan or quasi-loan rather than to the loan charge relevant step.

The provisions of Pt 7A on 5 April 2019 (or at the approved repayment date for an approved fixed term loan) will need to be applied to the previous relevant steps in order to determine the treatment under Pt 7A for the loan charge. For example, whilst the quasi-loan provisions were only enacted with the FA (No 2) 2017 changes, it will be necessary to consider whether there are amounts outstanding in respect of any quasi-loans made on or after 6 April 1999 in order to determine whether the loan charge applies.