UK To Expand Double Tax Treaty Passport Scheme

HM Revenue and Customs (HMRC) is planning to make its Double Taxation Treaty Passport (DTTP) scheme available to all UK borrowers following a consultation on a legislative amendment.

The DTTP scheme provides for Double Taxation Relief on UK loan interest payments made by a UK corporate borrower to overseas corporate lenders.

“The scheme will be made available to all UK borrowers that have an obligation to deduct withholding tax, including UK partnerships, individuals, and charities,” HMRC said in a consultation response document.

It added that transparent entities (including partnerships) will be admitted to the scheme as lenders where all of the constituent beneficial owners of the income are entitled to the same treaty benefits under the same treaty. In addition, sovereign wealth funds and pension funds who are utilizing withholding tax treaty rates will be admitted into the scheme as lenders.

The terms and conditions and guidance for the scheme will be updated on April 6, 2017.