Download the full outcome
Detail of outcome
This document summarises the responses to the consultation and sets out the government’s responses to the proposal to introduce legislation to provide that section 874 of the Income Tax Act 2007, which would otherwise require tax to be withheld, shouldn’t apply to a payment of interest where:
- the interest arises on a security issued by a company
- the interest-bearing security is admitted to trading on a multilateral trading facility
- that facility is operated by a recognised stock exchange regulated in an European Economic Area (EEA) territory
At Spring Budget 2017, the government announced its intention to introduce an exemption from withholding tax on interest for debt traded on Multilateral Trading Facilities (MTF), in order to make UK wholesale debt markets (that is, those focused on institutional investors) more competitive. The government also announced a consultation on the detailed implementation of the change.
This consultation sets out an outline proposal, and we are now seeking views from interested parties, including exchanges, potential debt issuers and investors, and their arrangers and advisers, to ensure the design of this exemption is as effective as possible and without unintended effects.