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HMRC internal manual

International Manual

Double Taxation applications & claims: permanent establishment and special relationship: How you recognise the ‘Special Relationship’ condition

The terms of the ‘Special Relationship’ condition in the DTAs are usually one of the following

  • the majority of DTAs you will be concerned with provide that no relief is available where “…. the amount of the interest or royalty paid exceeds for whatever reason the amount which would have been paid in the absence of such relationship”
  • in the older pre-1966 DTAs no relief is available where ‘… any interest or royalty exceeds a fair and reasonable consideration in respect of the indebtedness or rights’.