This practice note provides a summary of the UK withholding tax rules on payments of interest and certain other payments (such as annual payments, guarantee payments and intellectual property royalties).

It considers when withholding arises (including when interest has a UK source and when it is "yearly interest" rather than "short interest"). It also considers exemptions, such as the "quoted Eurobond" exemption and exemption under double tax treaties. Further, it discusses documenting for withholding tax, including gross-up clauses, and accounting for tax withheld.