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Budget 2017: Finance Tax - New withholding tax exemption for debt traded on an MTF

Budget 2017: Finance Tax - New withholding tax exemption for debt traded on an MTF

  • United Kingdom
  • Tax planning and consultancy - Budget

08-03-2017

Commenting on taxation measures announced in today's Budget, Ben Jones, partner, and Deepesh Upadhyay, principle associate at Eversheds Sutherland, say:

"The Government announced today that it will be introducing a new exemption from withholding tax for interest on debt traded on a Multilateral Trading Facility (MTF). This is in line with the approach taken by Government in recent years of introducing new withholding tax exemptions (e.g. the introduction of the Qualifying Private Placement exemption) and reducing the administration associated with market participants accessing withholding tax exemptions (e.g. through reform of the Double Taxation Treaty Passport scheme). These changes are all targeted at removing the barriers to the development of UK debt markets and to help plug the funding gap left by more traditional sources of finance.

"At present, the key withholding tax exemption available in respect of listed debt is the Quoted Eurobond exemption, which involves listing bonds issued by UK companies on a recognised stock exchange. MTFs are considered to be alternatives to traditional stock exchanges and “exchange lite”. We welcome the Government’s decision to introduce a new withholding tax exemption. The Government will be launching a consultation on 20 March 2017 in respect of the implementation of this new exemption. The usefulness of this exemption will ultimately depend on the conditions which will need to be satisfied. Eversheds Sutherland will be contributing to the consultation process to ensure that this new exemption is as useful and flexible as possible."

Please view our dedicated Budget 2017 hub here. It will give you access to our watch list, our contributors and relevant articles and tweets.

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