British wealth manger Hargreaves Lansdown has won a tax tribunal appeal against HM Revenue & Customs (HMRC) over tax charged on loyalty bonuses paid to investors.

Fifteen years back, the wealth manager launched a loyalty bonus that enabled investors to get discount against the ongoing annual management charges. Loyalty bonuses were deemed non-taxable at that time by HMRC.

However in April 2013, HMRC said that loyalty bonuses paid on funds outside ISAs or SIPPs would be taxed, a decision that Hargreaves Lansdown challenged.

The wealth manager expects the decision to help return at least £15m to nearly 150,000 investors, with HMRC having two months to appeal against the move.

Hargreaves Lansdown CEO Chris Hill said: “We saw the ‘discount tax’ which HMRC introduced in 2013 as unwarranted attack on private investors, so we launched a legal challenge, and I am delighted that the tax tribunal has supported our view.

“The ruling will not only see money returned to investors, but will also simplify their tax affairs, as there will be no need to declare the loyalty bonus on their tax returns. Furthermore, it is likely to benefit clients of all investment services providers who offer rebates on annual fund charges, not just clients of HL.”