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HMRC internal manual

International Manual

DT applications and claims - Provisional Treaty Relief Scheme for Interest

Syndicated Loans; application procedures continued

In many cases final membership of a syndicate will not be known for several weeks after the UK borrower wants the money. The syndicate manager is able to tell us this and to say when they expect to have full information about the eventual members. This does not prevent a PTR-SM2 being issued to the Syndicate Manager.

The application form asks the Syndicate Manager to estimate when they expect to have this information. Note should be taken of this date and enquiries made if the information is not received.

If the PTR-SM1 application form is in order, a letter of acceptance into the scheme on form PTR-SM2 should be issued to the syndicate manager. This will specify the UK payers entitled to use the authority, the country blocks of lending members covered by the authority, and the rates of tax (if any) applicable to the payments.

The Syndicate Manager must give a copy of the letter of acceptance into the Scheme to the UK company paying the interest. The letter of acceptance will continue in place until such time as our normal examination procedures are complete. This includes liaison with the tax office and Customs & International as necessary. If for any reason it is decided that Double Taxation relief is not available the provisional authority must be cancelled and the UK borrower will have to account for any tax that ought to have been deducted from interest payments.

Once normal examination is complete a formal SI1970/488 Direction is issued direct to the UK payer. An extra copy of the formal authority should also be sent to the syndicate manager.

Exchange of information

We have an obligation to exchange information with our treaty partners. Loans falling within the syndicated loan part of the Provisional Treaty Relief Scheme will need to be reported to the overseas tax authorities.