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HMRC internal manual

International Manual

Double Taxation applications and claims: Vouchers: How vouchers are issued

The original payer of interest, of a dividend, of royalties, or of other categories of income issues a voucher to the initial recipient of the payment, the payee. If the payee is a bank or finance house receiving the money on behalf of others, the payment may well be made to its subsidiary nominee company.

If the initial payee holds the security in a block on behalf of several others, this payee will in turn issue subsidiary vouchers to each of the holders of part of that block in respect of their portion of the income which the initial payee passes on to them.

The recipients of subsidiary vouchers may themselves hold their share of the security on behalf of several others, and so this process may need to be repeated down to the final level of single investors, who may be individuals, corporates, collectives, or others.

Some custodians of block holdings of several different investments issue consolidated vouchers to their clients in respect of all of each client’s portions of several block holdings, producing one or more categories of income.

Where custodians of block holdings are resident outside the UK, they usually issue either form R189M or R189N. But sometimes they issue instead their own unauthorised form of subsidiary voucher, or merely some form of remittance advice note describing the income. [A remittance advice note will not include the necessary words ‘I certify …………’].

In all cases, overseas subsidiary vouchers and all their substitutes should be validated by the block voucher issued to the block holder by a UK resident body. If the overseas issuer of subsidiary vouchers has received its payment from another overseas block holder further up the chain of payers, that chain should be followed upwards until it reaches a UK issued block voucher. This is because HMRC can audit and assess, if necessary, UK resident issuers of vouchers; it can do neither when the issuer is resident outside the UK.

Where payments are passed between members of the CREST securities settlement system, the payer will not normally issue a voucher to the recipient. Unusually, the CREST member receiving income through that system is entitled to write his own voucher.