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Ardmore Construction Ltd v HMRC: implications for UK companies

The UK company provides many tax advantages to international groups as a holding company, but the potential liability of a UK company to deduct basic rate income tax from annual interest it pays to overseas lenders should not be overlooked.

For many international groups this potential withholding tax liability is overridden by the interest article of a UK double tax treaty, if the UK company's lender is resident in a Contracting State. However, this note assumes there is no possibility of treaty or EU Directive reliefs. The most common reason for this is that the lending company is an offshore company, i.e. not registered and resident in an EU member state and not party to a suitable tax treaty with the UK.

In my article, I discuss the implications for UK companies borrowing from overseas lenders using the case of Ardmore Construction Ltd to illustrate the points raised.

To continue to read this article in full, please download it here

 Martin Palmer


Martin Palmer
Consultant
T: +44 (0)117 918 1321
E: martin_palmer@jordans.co.uk

 

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