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HMRC internal manual

International Manual

DT applications and claims - Provisional Treaty Relief Scheme for Interest

One to One Loans: Application procedure

Borrowers may telephone CAR Residency to ask

  • Do we know the lender?
  • Has the lender made a successful claim within the last 3 years?

It should be sufficient to look on IRS for finalised claims. Any successful claim is sufficient.

Our response must be limited to “the lender has had dealings with Centre for Non-Residents within the last 3 years to the extent that it has established a recent successful entitlement to relief”.

If you are unable to give the above positive answer then the reply must be limited to “You should refer back to the lender who should be asked to call us direct.”

Taxpayer Confidentiality

Concerns about taxpayer confidentiality need to be borne in mind. Care should be taken that no other information about the lender is given. You should not be drawn on the reasons that the lender does not (currently) qualify for the Provisional Treaty Relief Scheme.

If the lender has previously made successful claims/applications, send a copy of form PTR-PAY1 to the borrower. The form can be downloaded from the website

When this form is returned, you should issue a provisional authority on form PTR-PAY2 to the borrower. This letter of acceptance into the Scheme is their reason not to deduct tax (or to deduct at a reduced rate).

Formal Double Taxation Treaty Claim

The lender must make sure that a formal certified Double Taxation claim form is with CAR Residency within 3 months of the date on which the provisional authority is issued. Failure to do so will result in us cancelling the provisional letter of acceptance into the scheme and requiring the borrower to account for tax in the usual way. Care should be taken before exercising any discretion in this area. We do not want to set any precedent but, if representations are made about why a letter of acceptance into the Scheme should not be cancelled, these must be carefully considered. Otherwise the PTR-PAY2 is to be cancelled and any eventual formal claim dealt with on its own merits. In accordance with the 1994 Tax Bulletin statement any formal SI Direction will then only be backdated to the date the formal certified Double Taxation claim is received.

NB this 3-month deadline must not be breached. Claims should be put in B/F for 2 months at which time a reminder must be sent to the borrower to say no claim has been received and warning them that the PTR-PAY2 will be cancelled.

If the formal claim is received within 3 months of the date on which the PTR-PAY2 was issued the authority may continue in place until such time as our normal examination procedures are complete. If for any reason it is decided that Double Taxation relief is not available the PTR-PAY2 must be withdrawn and the UK borrower must account for any tax that ought to have been deducted from interest payments.