On 6 April 2017, HMRC published its revised guidance on (and terms and conditions of) the double taxation treaty passport (DTTP) scheme. This follows on from last year’s consultation on proposed changes to the regime, and the response published at this year’s Spring Budget.
The new guidance confirms the previously announced extension of the regime to:
• all UK borrowers that have UK withholding tax obligations (to include partnerships, individuals and charities, ie not just corporate borrowers)
• “transparent” lenders, provided that all beneficial owners of the income are eligible for the same treaty benefits and are resident in the same jurisdiction
• sovereign and pension fund lenders, again provided that all beneficial owners of the income are eligible for the same treaty benefits and are resident in the same jurisdiction.
There are, however, other more subtle changes which are not as welcome. HMRC no longer commit to a 30-day turnaround period (from submission of form DTTP2) for issuing directions for the borrower to withhold at the applicable treaty rate.
The revised guidance, terms and conditions can be viewed here.