Holder will be entered into publicly available register
HMRC are to launch a double taxation treaty passport scheme for overseas corporate lenders, to start on 1 September.
Overseas lenders may, however, register for a ‘treaty passport’ immediately.
The scheme will operate in the following way.
- An overseas corporate lender in a country with which the UK has a double taxation treaty that includes an interest or income from debt-claims article may apply for a treaty passport from HMRC.
- If granted, the passport holder will be entered into a publicly available register with a unique double taxation treaty passport number. Prospective UK resident corporate borrower will be able to check the online register to verify the lender’s treaty passport holder status.
- The UK borrower will notify HMRC within 30 days of the passported loan (the relevant form, DTTP2, will be available from 1 September 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 double taxation treaty.
