Changes to HMRC's DT Treaty Passport (DTTP) scheme
HM Revenue & Customs (HMRC) operates a Double Taxation Treaty Passport (DTTP) Scheme for overseas corporate lenders. The Scheme applies only to loans taken out on or after 1 September 2010.
From April 2013, the Scheme has been revised to improve the customer experience of its users and enhance the scheme’s effectiveness. The changes are based on operational lessons learnt since the Scheme’s inception and representations made by our customers.
There are two significant changes:The removal of the requirement for the UK borrower company to send a completed form DTTP2 notification to HMRC within 30 working days of the start of the borrower’s loan relationship with the lender. Instead, the borrower should send the form to HMRC at least 30 working days before the first interest payment is due on the loan. HMRC will now in certain circumstances consider issuing a treaty passport to a US disregarded LLC or US S-Corporation.
Full details of these changes, along with other minor updates are in the revised DTTP Overview, Terms and Conditions, and Technical Questions and Answers.
An overview of the scheme
Here is a basic outline of how the scheme works. Please note: HMRC's Double Taxation Treaty Passport Scheme is for overseas corporate lenders only. Individuals are not eligible.An overseas corporate lender in a country with which the UK has a double taxation treaty that includes an interest or income from a debt-claims Article, may apply for a 'Treaty Passport' from HMRC. If a Treaty Passport is granted by HMRC, the passport holder is entered onto a publicly available register with a unique DTTP number. Follow the link below to view this register on the HMRC website. Prospective UK resident corporate borrowers should check HMRC's online register (Register of Double Taxation Passport holders) to verify the lender's Treaty Passport holder status. If the UK borrower enters into a loan agreement with a lender who is registered as a Treaty Passport holder, the lender will notify them of their passport holder status and reference number. The UK borrower should then notify HMRC of the making of a 'passported' loan. The notification should be made using form DTTP2. Form DTTP2 can be completed and sent to HMRC online or it can be downloaded, filled in and returned to HMRC by post. (See the section below) HMRC will use the DTTP2 notification details to issue a 'Direction' to the UK borrower to pay the interest with Income Tax deducted at the rate set out in the relevant Double Taxation Treaty. For non-Treaty Passport situations, the normal 'certified double taxation claim' remains the default method for applying for Double Taxation Treaty Relief.
Overseas lenders - registering for a Double Taxation Treaty Passport
Any overseas corporate entity - or concern treated by its country of residence as a corporation for tax purposes - may apply for recognition as a Double Taxation Treaty Passport Holder.
To register for a Treaty Passport, please read the terms and conditions and then complete form DTTP1. There are instructions on the form to help you.
How UK borrowers tell HMRC about a passported loan
UK borrowers can use online form DTTP2 to tell HMRC about a 'passported' loan. Using the online form will help ensure that HMRC has all the information they need to consider making a Direction. Go to online form DTTP2
If you choose not to use the online form, you can download form DTTP2. The form contains instructions on how to fill it in. Please send your completed form to HMRC at the following address:
HM Revenue & Customs
Large Business Service
Double Taxation Treaty Team
Castle Meadow Road