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HMRC internal manual

Double Taxation Relief Manual

Non-residents: UK income: Annual payments: other than co.

Where under the authority of a notice issued by FICO (International), a payment of interest, royalties, maintenance payments or other annual payments other than a payment made by a company within the charge to Corporation Tax (see DT1825) or a payment to which ICTA88/S125 applies (see IM4865) is made to a non-resident without deduction of tax, or under deduction of tax at a reduced rate, relief is given to the payer as follows

a) Interest Flowchart (use Interest Flowchart link to view flowchart)

b) Royalties, maintenance and other annual payments Flowchart (use Royalities, maintenance and other annual payments Flowchart link to view flowchart)

Any allowance or relief to be given may be given by discharge or repayment, and, if the taxpayer so desires, collection of an appropriate amount of tax may be held over until the required information is available (see DT1880 onwards).

In cases within (b)

i) the computation for United Kingdom tax purposes of the profits of the payer of the income is not affected by the authority to pay the income without deduction of tax or under deduction of tax at a reduced rate;

ii) instructions regarding the effect of the authority on carry-forward of losses are contained in IM3554.

Where a payment to which ICTA88/S348, ICTA88/S350 would normally apply is made without deduction of tax, or under deduction of tax at a rate less than the domestic law rate, and it appears that exemption or partial relief may be due under an agreement, but the district does not hold a copy of an authority to cover the payment (or, in a ‘free of tax’ case, a report under DT1837 or 1838), the facts should be reported to FICO (International), Nottingham. Pending their reply no relief should be allowed to the payer and no assessment (unless a time limit is running out) made under Sections 348 or 350.

As regards payments of interest or royalties made under ‘free of tax’ agreements, see DT1836 - DT1840.