Individual resident in UAE for last 3 years has provided loan to UK private limited company.
Interest of £20,000 was paid to individual having had £5,000 income tax deducted at source.
No tax is payable on this in the UAE - can this tax be reclaimed from HMRC using the HS204 form as part of the ITR submission? This seems to be the case according the article 11 of the double tax treaty. There doesn't appear to be any clause for being subject to tax in the UAE.
Thanks for any help
Replies (4)
Please login or register to join the discussion.
If the conditions of article 11 para 3 are met then I assume the interest is only taxable in UAE (or not), but doesn’t go on a UK return. Any income tax withheld would have to be reclaimed from HMRC. Relief at source can also be claimed to avoid future withholding.
Also, do you need to consider the disregarded income rules or does the DTA trump these?
I would complete this form if the income is ongoing.
https://assets.publishing.service.gov.uk/government/uploads/system/uploa...
I am not familiar with the form you mention, is this submitted with a tax return? Why don’t you need to prove you are resident in that country?
I don’t see the subject to tax condition.
The HS304 is submitted with an SA return to claim back tax which has been deducted and is not due under a DTA. You don't need to prove you are resident in that other country because you are declaring it.
I suppose it depends whether the individual is otherwise submitting an SA return or not.