Hargreaves Lansdown has won an appeal against HM Revenue & Customs, in a ruling that the refunds it offered investors are not taxable.
The online investment broker introduced refunds of the annual management charge (AMC) as loyalty bonuses 15 years ago.
But despite assuring Hargreaves Lansdown at the time that they would not be taxable, HMRC changed its mind a decade later and decided they should be taxed as income.
Now a judge in the Tax Tribunal has sided with the Bristol-based firm and ruled the refunds are not taxable.
Following the ruling, Hargreaves Lansdown has said at least £15m will now be returned to around 150,000 investors - though HMRC has two months to appeal the decision.
Judge Thomas Scott said: "In my judgment, the evidence makes it plain that the nature and quality of a loyalty bonus payment is that it is not a 'profit' to an investor, but a reduction of his net cost. It is quite unlike an annuity payment or interest in respect of which a recipient need do nothing but sit back and receive the payments.
"The assertion by HMRC that an investor does not need to pay or bear an AMC to receive a loyalty bonus and that there is nothing in the contract between HL and investors to impose the AMC ignores the plain terms on which HL offers and permits investment to be made.
"The terms and conditions, and indeed the marketing material, could scarcely make it plainer that in investing through HL in a particular fund, a schedule of charges will apply."
He added HMRC's claim being paid the loyalty bonus each month without the recipient being charged the applicable AMC was not an option under the scheme and would have been "commercial nonsense".
Since 2013, when HMRC changed its position, Hargreaves Lansdown has been paying bonuses but after deducting a 20 per cent provision for the tax, with part of this money being held by HMRC and part by Hargreaves Lansdown.
This money - around £15m - can now be returned to investors, in the event HMRC does not appeal the tribunal's decision.
Chris Hill, chief executive of Hargreaves Lansdown, 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."
HMRC has been asked to comment.