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HMRC internal manual

International Manual

Double Taxation Agreements: Jersey: Income from a UK source paid to a resident of Jersey - Industrial or commercial profits paragraph

Paragraph 3 provides for the relief from UK tax of ‘the industrial or commercial profits of a Jersey enterprise’.

In practical terms, this means that we can allow relief on UK interest paid to a bona fide bank in Jersey, since it can be held that interest represents part of the bank’s profits as defined by paragraph 3.

So if you get a claim from a bank in Jersey you will need to;

  • be certain that it is a recognised bank - the Banker’s Almanac has a list of banks but is subscription only, alternatively HMRC staff can refer to the LB page on Banking which contains an external link to the Prudential Regulation Authority (PRA) which publishes a list of banks that is updated monthly.
  • consider if you should have the loan agreement reviewed by the HMRC office which deals with the accounts of the UK borrower - see INTM342010 

If these checks are satisfactory, you can allow full relief.

But if you receive a claim from a Jersey enterprise in respect of any other category of income, please refer to CAR Technical Advice Group before taking any action.