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HMRC internal manual

Double Taxation Relief Manual

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HM Revenue & Customs
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Non-residents: UK income: Interest: royalties

Interest, royalties, maintenance or other annual payments may be payable under an agreement providing for the payment of such a sum as after deduction of United Kingdom tax at the basic or lower rate will leave a specified payment. See RE1230 regarding maintenance agreements in such terms for years 1989-90 and later.

a) The gross payment on which United Kingdom tax is payable is the sum specified in the agreement grossed at the basic or lower rate.
b) The recipient of such a payment who is a resident of a country with which the United Kingdom has a double taxation agreement providing for exemption or partial relief from United Kingdom tax on the payment is entitled to relief from United Kingdom tax computed on the gross payment (see (a) above), if he satisfies the conditions for relief laid down in the double taxation agreement.
c) If FICO (International) has authorised payment without deduction of tax or for deduction of tax at a reduced rate, give relief to the payer in accordance with the instructions at DT1822 and DT1825.
As regards an agreement providing for maintenance by a parent resident in the United Kingdom to a non-resident minor child or to a non-resident individual for on behalf of such a child, see DT1820.