UK and International Tax news
Double Tax Treaty Passport Scheme
Wednesday 2nd June 2010
HMRC has announced that it is launching a Double Taxation Treaty Passport (DTTP) Scheme for overseas corporate lenders. The Scheme was launched at a meeting held at HMRC in London on 1 April 2010.
Under the Scheme, an overseas corporate lender in a country with which the UK has a double tax treaty (DTT) that includes an interest or income from debt-claims article may apply for a Treaty Passport (TP) from HMRC.
If a TP is granted by HMRC, the passport holder will be entered into a publicly available register with a unique DTTP number. The register will be made available online on the HMRC website. The online register can be consulted by a prospective UK resident corporate borrower to verify the lender’s TP holder status.
If the UK borrower enters into a loan agreement with a lender who is registered as a TP holder, the lender will notify them of their passport holder status and reference number. The UK borrower will notify HMRC within 30 days of the passported loan.
The Scheme will begin on 1 September 2010 with form DTTP2 being available for this purpose from that date, however overseas lenders may register for a TP from 1 June 2010.
HMRC will use the DTTP2 notification details to issue a direction to the borrower to pay the interest with income tax deducted at the rate set out in the relevant DTT.
For non-treaty passport situations, the normal certified DT claim remains the default method for applying for DTT relief.
The DTTP Scheme is for overseas corporate lenders only; individuals are not eligible.
If you would like more details on the operation of the scheme, please contact Keith Rushen on +44 (0)20 7486 2378Contact Us