Claiming Double Taxation Relief for companies and other concerns
How companies and other concerns including partnerships, pension schemes and trusts, can claim Double Taxation Relief. Types of income covered by double taxation treaties.
If a company has income from a source in one country and is resident in another, it may be liable to pay tax in both countries. To avoid double taxation in this situation, the UK has negotiated treaties with more than 100 countries.
Companies resident in a country where the UK has a double taxation treaty may be able to claim exemption or partial relief from UK withholding tax on some types of UK income. The conditions of exemption or relief can be found in the relevant double taxation treaty.
References to companies throughout this guidance also apply to partnerships, pension schemes and trusts.
Interest, royalties, pensions and purchased annuities
A company may be able to apply for relief from UK withholding tax if it’s resident in a double taxation treaty country and receives income from UK sources of:
- interest
- royalties
- pensions
- purchased annuities
The relief available depends on the terms of each double taxation treaty and HMRC will decide if an application is allowable.
Where relief is allowed, HMRC will authorise payment either:
- without tax deducted
- with tax deducted at a reduced rate as shown in the double taxation treaty
If tax has already been deducted from previous payments of the income, the repayment of UK tax is made by HMRC.
Double Taxation Relief
Relief from UK withholding tax covered by a double taxation treaty is not automatic.
The overseas company has to apply to HMRC using the DT Company form, unless it’s covered by the Double Taxation Treaty Passport Scheme. Certification of residence is required — see the ‘How to apply’ section of the form for additional details.
Applications for relief at source and claims to repayment of UK withholding tax may be made to the HMRC Double Taxation Treaty Team on the relevant international tax form.
You can:
- apply for relief at source from UK withholding tax on interest, royalties, pensions and purchased annuities
- claim repayment of UK withholding tax already deducted
You do not need to send tax vouchers with your completed form, but keep them safe in case they are needed later to support your claim. If you have any doubt about how you have completed the form, you can send vouchers if you think it will help.
Give relief on royalties without HMRC authorisation
You can give relief on royalties without HMRC authorisation if both apply:
- your company is located in the UK
- you reasonably believe that an overseas payee of royalties is entitled to relief under a double taxation arrangement
You will need to include details of any payments in your Company Tax Return.
Double Taxation Treaty Passport Scheme
The Double Taxation Treaty Passport Scheme gives some overseas lenders reduced tax rates on interest payments made by borrowers. The scheme is available to all borrowers who are required to withhold Income Tax at the basic rate on some loan interest payments to overseas lenders.
Under the scheme, the lenders are recognised by HMRC as residents of countries where the UK has a double taxation treaty. The recognised lenders are known as ‘treaty passport holders’.
Loans dealt with under the scheme can, with HMRC approval, be paid with deduction of withholding tax at the rate specified in the relevant treaty.
The scheme is an alternative to the certified claim method for reclaiming tax withheld.
Fill in form DTTP1 to apply for a Double Taxation Treaty Passport.
Email your application to the Double Taxation Treaty team at dttteam.lbnottingham@hmrc.gov.uk.
If you cannot email your application, send it by post to:
HM Revenue and Customs
Large Business — DTT Team
S1753 Benton Park View
Benton Park Road
Newcastle upon Tyne
NE98 1ZZ
For general enquiries you can contact us by:
Telephone: 03000 547 584
If you’re phoning from outside the UK: +44 (0) 3000 547584
Email: dttteam.lbnottingham@hmrc.gov.uk
Property income distributions paid by UK Real Estate Investment Trusts (REITs)
A ‘UK-REIT’ is a company which has a property business. It must be resident in the UK and listed on a recognised stock exchange.
Under the UK regime, the UK-REIT pays no tax on its qualifying property income, but the company (principal company for a Group REIT) will withhold UK Income Tax at the basic rate when making a distribution out of its qualifying property income. This is called a property income dividend and the company is obliged to distribute most of its profits this way.
There is more information on REITs in the HMRC manual.
Qualifying non-residents have the opportunity to claim repayment of some or all of the tax that is deducted from property income dividends that are paid by UK-REITs under a number of double taxation agreements.
To claim double taxation relief complete the relevant claim form:
USA companies
International Tax: UK-USA Double Taxation Convention (Form US-Company UK-REIT)
Other companies
UK Real Estate Investment Trusts (Form UK-REIT DT-Company)
There are guidance notes at the end of each claim form.
Contact details for REITs
HM Revenue & Customs
Trusts
BX9 1EL
UK
Telephone: 03000 516 644
If you’re phoning from outside the UK: +44 (0) 3000 516 644
Last updated 22 January 2024 + show all updates
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Information around giving relief on royalties without authorisation has been added.
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The email address for the Double Taxation Treaty team has been updated.
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The addresses for emailing or posting your applications to HMRC have been updated. The following sections have been removed as they are no longer in force: EU cross-border interest and royalties, company 'portfolio' shareholders, direct investor companies, and direct investor dividend claim forms.
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This guidance has been updated to include Helpline telephone number and team email address.
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First published.