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Treatment of commercial loans revised

20 October 2015
Issue: 4523 / Categories: News

No change to arrangements where loans brought into or used in the UK before 4 August 2014.

HMRC have decided not to apply the change announced in August 2014 to arrangements where the loan was brought into or used in the UK before that date. As a result from 15 October 2015 there is no requirement to repay or replace foreign income and gains collateral with non-foreign income and gains collateral before 5 April 2016.
 
The department withdrew its concessional practice in the Residence Domicile and Remittance Basis Manual at RDRM33170 for commercial loans under which servicing payments were taxed as remittances and not the underlying collateral last August. As a result anyone on the remittance basis who had used foreign income and gains as collateral for a loan brought into or used in the UK before that date had to notify HMRC if they had not declared a remittance. The remittance would be taxable...

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