This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

International Exchange of Information Manual

Spontaneous exchange of rulings: Examples

IEIM530200: Spontaneous exchange of rulings: Examples


Example 1


A UK company receives agreement from HMRC that it can pay its interest on a loan from a non-UK and non-EU resident company at the treaty rate.  It does not have to deduct tax at the basic rate on payment of the interest.  The UK has a Double Taxation Agreement with the jurisdiction where the overseas company is resident which allows for exchange of information.


As the interest is payable to a non-EU resident company at the treaty rate consideration should be given to exchanging the information spontaneously with the country of residence of the overseas company under the Double Taxation Agreement.  The decision to exchange spontaneously should include whether the loan has been made in the normal course of business of the lender.  If so, it is unlikely that the information will be of interest to the overseas tax administration, even though it would be foreseeably relevant.

The clearance given to the UK company falls to be exchanged under the DAC. 


Example 2


Ms B, UK taxpayer and sole trader, requests and receives a non-statutory clearance as she wishes to confirm the tax treatment of certain business transactions before she files her tax return. 

The transactions result in a tax consequence for another jurisdiction.  The transactions do not give rise to profit-shifting or base erosion concerns and are not one of the five types of rulings required to be exchanged under Action 5.


Again this clearance is within the meaning of a ruling for Action 5 (IEIM540100), but is not on the list at IEIM541010, so is not covered by that obligation. 

There will be a tax consequence for another jurisdiction, so there is a cross-border effect (IEIM550100); but the clearance is in respect of a natural person, so is not covered by the DAC (IEIM524200).

As there will be a tax consequence in another jurisdiction, it is foreseeably relevant to exchange the ruling with that jurisdiction; this should be done spontaneously under the relevant exchange instrument.