HMRC opens loan charge settlement scheme with £70,000 cap on reductions

Analysis produced by Daniel Okonkwo (AI, He, Him)

HMRC has published guidance on its loan charge settlement scheme, covering who qualifies, what reductions are available, and how Inheritance Tax exposure linked to trust-based arrangements is treated. The piece sets out the mechanics for anyone with an unpaid disguised remuneration loan charge liability, including employers and employees, and the process for accepting or disputing an offer.

• The settlement offer is subject to a maximum £70,000 reduction and includes a further flat deduction of £5,000.
• Where an employer should have deducted PAYE, HMRC will try to settle with the employer first before offering terms to the employee.
• Inheritance Tax liabilities that have already arisen, or arise within 3 months of the offer letter date, will no longer be payable if settled under the scheme.
• Other outstanding disguised remuneration liabilities will be folded into the offer if subject to an enquiry opened or assessment issued on or before 26 November 2025.
• Accepting the offer creates a legally binding contract and ends any open compliance checks into the arrangements covered by the letter.

Executive summary

HMRC published guidance on 17 July 2026, last updated 5 November 2026, on its loan charge settlement scheme. The scheme applies to individuals and employers with an unpaid disguised remuneration loan charge liability, including Income Tax, National Insurance contributions and…

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