A4.446 Cross border interest paymentsWhere interest is paid to an overseas company, an application can be made by the lender for relief from UK tax (a reduction in the amount of UK tax that is deducted at source by the payee). Where the lender is resident in a country with which the UK has a double tax agreement, an application can be made for the payee to deduct tax at source at the 'treaty rate'. This may be as low as zero in some cases. The process of obtaining authority to apply the treaty rate of withholding tax can give rise to difficulties and delays in practice. HMRC have therefore introduced a number of schemes designed to simplify the process for the following loans: • for syndicated loans where the overseas lending members are corporations, and where a syndicate manager acts on behalf of all the members of the syndicate. Broadly, under the scheme HMRC
Where interest is paid to an overseas company, an application can be made by the lender for relief from UK tax (a reduction in the amount of UK tax that is deducted at source by the payee). Where the lender is resident in a country with which the UK has a double tax agreement, an application can be made for the payee to deduct tax at source at the 'treaty rate'. This may be as low as zero in some cases. The process of obtaining authority to apply the treaty rate of withholding tax can give rise to difficulties and delays in practice. HMRC have therefore introduced a number of schemes designed to simplify the process for the following loans:
• for syndicated loans where the overseas lending members are corporations, and where a syndicate manager acts on behalf of all the members of the syndicate. Broadly, under the scheme HMRC
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