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Set off CT61 tax against US tax reclaim

UK company paid interest to a US trust. Payable by UK company but repayable to US trust

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UK company borrowed money from US trust and paid interest in June 2016. Basic rate tax should have been deducted but wasn't. However, under the UK/US DTT the tax that should have been deducted is in any event reclaimable by the US trust. Provided we completeĀ all the relevant HMRC forms in respect of the trust for the reclaim, will HMRC simply accept an offset and just charge interest on the CT61 tax from 15 July 2016 to the deemed date of repayment to the US trust? Has anyone any experience of doing this?

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By SteLacca
13th Aug 2019 13:40

I'm not convinced that interest should have been deducted. Article 12 Para 1 of the DTT refers.

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By Matrix
13th Aug 2019 15:37

The payer would have needed a certificate of residence or a treaty form to pay the interest without the deduction of tax.

OP - I very much doubt it. No harm in asking.

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