INTM342100 - DT applications and claims - Types of income: Interest

Privately Arranged Loans: Non-company lenders

You may receive a claim involving a loan between a non-resident individual and a UK company that appears to be a private arrangement. For example it is not a loan from a bank or a holding of a loan stock that is traded on a stock exchange, but is a loan made under an agreement between an individual overseas and a UK resident company.

In these circumstances, you should write to the Regional Centre for the UK company paying the interest enclosing a copy of the loan agreement and say that our concern is to establish that treaty benefits are available to our claimant. For companies paying interest whose tax affairs are dealt with by a Customer Compliance Manager (CCM) in Large Business, please contact the CCM.

Where the company is dealt with in Wealthy and Mid-Sized Business (WMBC), please consider writing to the relevant Direct Tax Core Team.

You should ask

• If the Regional Centre considers that tax is deductible from the payments that are due to our claimant (the individual making the loan).
• Has the Regional Centre any evidence to suggest that there may be a “special relationship” between the UK company and the individual making the loan.
• If, by reference to the instructions at INTM510000 onwards, the Inspector has any general concerns about the financing structures of the UK company.
• If so, will the Regional Centre consider if the provisions at Part 4 of TIOPA 2010 might apply to the loans.