06 October 2005
A UK resident individual has lent money to a UK discretionary settlement to enable it to carry out a capital project. Interest is to be paid on the loan for a period that will exceed one year.
Is there any requirement for the settlement to deduct savings-rate tax at 20% from the interest payments made? And, if there is such a requirement, how does one account for the tax deducted and then paid over to HMRC?
Taxation readers' clarification on these points would be gratefully received.
Query T16,691 — Interested.
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