UK: Qualifying private placements; exemption from withholding tax

UK withholding tax exemption for unlisted debt

HM Revenue & Customs (HMRC) and HM Treasury are continuing to consult on an exemption from the obligation to withhold tax from interest payments on “qualifying private placements”—unlisted debt typically issued to institutional investors. A revised draft of the regulations implementing the exemption, that has been circulated, reflects many of the points discussed during the consultation. In a potentially important change, the draft regulations would now apply to both new and existing borrowing. In addition, the exemption could also now apply to convertible debt.

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KPMG observation

The new exemption may provide a viable alternative to listing debt in order to qualify for the quoted Eurobond exemption. Groups that are considering issuing privately held debt may wish to consider this new exemption.

 

Read a September 2015 report [PDF 770 KB] prepared by the KPMG member firm in the UK: Weekly Tax Matters (18 September 2015)

Other topics discussed in the KPMG report include:

  • Indirect tax concerning partial exemption and rounding
  • Employment tax update on employment related securities annual returns
  • Personal tax statement revision of Practice D12 - partnership capital gains

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