This practice note is a summary of the UK withholding tax rules on payments of interest and certain other payments (such as annual payments, guarantee payments, patent royalties and other 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, and outlines the effect of the EU savings tax directive. Further, it discusses documenting for withholding tax, including gross-up clauses, and accounting for tax withheld.
NOTE: This resource is being reviewed in light of the Finance Act 2015. For more information, see Legal update, Finance Bill 2015 receives Royal Assent.