Student Loan Repayment on Company Sale Award

bobbins90

Hi,

This is my first post and it's about a bit of an unusual scenario so I'm hoping it's in the right place.

I currently don't automatically repay any of my plan 2 student loan as my salary is below the repayment threshold. A couple of years ago, my employer awarded me a number of units in an "Employee Benefit Trust' which would be payable to me in the event of the company being sold. They have awarded me additional units on an annual basis.

Last month, the company was sold which resulted in my award being paid to me alongside my October salary through PAYE. As a result, a significant amount has been deducted for student loan repayment (9% of the pre-tax award amount was deducted). Do I have any claim to have this overpayment returned to me? I have read the Student Loan Overpayment Refund article on this site (sorry I can't link to it yet as a new member) but I don't think this scenario is mentioned.

I thought that student loan was only repaid based on salary, and given this award is not related to my salary is it incorrect for HMRC to deduct a student loan repayment from it?

Thanks.

kaMelo

I'd be more worried about whether your EBT attracts the attention of HMRC as many of these were a tax dodge, not unlike the loan charge scheme, to keep salaries low. What's happening going forward, are you receiving an enhanced salary instead of the shares?

Either way it's income, you've been paid via PAYE and had student loans deducted accordingly. Whether you're entitled to a refund of some or all of this will only be known and the end of the tax year.

biscan25

Provided you will earn less than £19,895 this entire tax year you can reclaim the repayments. If you earn a penny over this, you can't reclaim anything.
Repaying your student loan: Getting a refund - GOV.UK (www.gov.uk)

MalMonroe

biscan25 said:

Provided you will earn less than £19,895 this entire tax year you can reclaim the repayments. If you earn a penny over this, you can't reclaim anything.
Repaying your student loan: Getting a refund - GOV.UK (www.gov.uk)

OP said that they are on Plan 2, so it's £27,295, not £19,895.