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Applications and claims by non-residents under double taxation treaties

Applications and claims under double taxation treaties

If you have income from a source in one country and are resident in another, you may be liable to pay tax in both countries under their tax laws. To avoid 'double taxation' in this situation, the UK has negotiated Double Taxation (DT) treaties with more than 100 other countries. Each treaty is called either a 'Double Taxation Agreement' or a 'Double Taxation Convention', depending on the wording of the treaty.

The DT Digest is available by following the link below, which summarises the main relieving provisions of the double taxation treaties HM Revenue & Customs (HMRC) deals with.

Digest of Double Taxation Treaties - April 2012 (PDF 201K)

If you are a resident of a country with which the UK has a DT treaty, you may be able to claim exemption or partial relief from UK tax on certain types of income from UK sources. The precise conditions of exemption or relief can be found in the text of the relevant treaty.

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Who can claim?

Relief from UK tax provided in a DT treaty is not automatic. Treaty benefits must be the subject of an application to HMRC. Only the overseas person receiving the income can make a valid application.

Applications for relief at source and claims to repayment of UK income tax may be made by:

  • individuals
  • corporations
  • other concerns such as partnerships, pension funds, trusts etc

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What types of income do the DT treaties cover?

The types of income covered by the DT treaties fall into two main categories. The links below will give you more information on each category.

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Interest, royalties, pensions and purchased annuities

As a resident of a DT treaty country who receives any of the following income from UK sources:

  • interest
  • royalties
  • pensions and purchased annuities

you may be able to apply for relief from UK tax. Your application will be dealt with by HMRC Residency.

The relief available depends upon the terms of each DT treaty and HMRC decides whether an application is allowable. If it is, relief at source is normally allowed on future payments of the income. HMRC directs the payer to pay the income either:

  • without tax deducted
  • with tax deducted at a reduced rate of tax as laid down in the DT treaty

Where tax has already been deducted from previous payments of the income, the repayment of UK tax is made by the UK HMRC.

Details of the application/claim forms you should use are listed below.

Specialised interest and royalty applications and claims

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The paperwork: what form do I use to claim relief on interest, royalties pensions and purchased annuities?

The UK has DT treaties with more than 100 countries. HMRC has a range of forms for residents of these countries to claim relief from UK income tax.

You can use the same form to:

  • apply for relief at source from UK income tax on interest, royalties, pensions or purchased annuities
  • claim repayment of UK income tax already taken off

HMRC is updating and improving its forms. The new versions are published on this website as soon as they are ready. Please check these pages regularly so that you get the latest version of the form for your country of residence.

You do not need to send tax vouchers with your completed claim form, but you should keep them safe in case they are needed later to support your claim. If you have any doubt about how you have completed the form you can send vouchers if you think it will help.

Downloadable forms

Downloadable forms are available for residents of all countries with which the UK has a comprehensive DT treaty. To get the form, please select the name of your country of residence.

If your country of residence is not shown, you can use form DT/Individual or DT/Company.

DT Individual

DT Company

Property income distributions paid by Real Estate Investment Trusts (UK-REITs)

From 1 January 2007, Property Income Distributions are paid after deduction of basic rate income tax. You can find out about relief from UK tax on property income distributions and go to the forms available to claim relief

Or you can get the form you need from HMRC Residency.

To make sure that you get the correct claim form please:

  • give your full name and address
  • say which type of income you are receiving

After completion, the form needs to be certified by the taxation authorities of your country of residence to confirm that you are a resident of that country.

EU cross-border interest and royalties

For companies in the EU that receive interest or royalties from 'associated companies' in the UK, you can find out about relief from UK income tax on cross-border interest or royalties and use form EU Interest & Royalties, follow the link below for more information.

Cross Border Interest and Royalty payments

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Dividends from UK companies

Individuals

Some of the UK's DT treaties provide for payment to a resident of the other country of part of the tax credit attached to UK dividends. But in practice, the amount that the UK retains under the DT treaty covers the whole of the tax credit. So if a shareholder made a DT treaty claim for payment of tax credit, there would be no balance of tax credit remaining for HMRC to pay.

Company 'portfolio' shareholders

Some of the UK's DT treaties provide for payment to a resident of the other country of part of the tax credit attached to UK dividends. But in practice, the amount that the UK retains under the DT treaty covers the whole of the tax credit. So if a company 'portfolio' shareholder made a DT treaty claim for payment of tax credit, there would be no balance of tax credit remaining for HMRC to pay.

Direct investor companies (which control 10 per cent or more of the voting power in the UK company paying the dividend)

The UK's DT Conventions with the following countries provide specific entitlements to direct investor companies. Please select the name of your country of residence for more information:

Payment of tax credit on UK dividends paid to direct investor companies (which control 10 per cent or more of the voting power in the UK company paying the dividend)

The UK's DT Conventions with Belgium, Italy, Luxembourg, Netherlands, Sweden, (and Switzerland for dividends paid before 6 April 2009) provide an entitlement to a tax credit to a direct investor company which controls 10 per cent or more of the voting power in the UK company paying the dividend. This is equal to half the tax credit to which a UK resident individual would be entitled and for payment of the excess of that half tax credit over their liability to UK tax. The UK tax liability is 5 per cent of the aggregate of the dividend and the half tax credit. Here is an example:

a) Amount of UK dividend paid to direct investor company £1,000,000.00

b) UK tax credit £111,111.11

c) One half of the tax credit £55,555.55

d) Aggregate amount of dividend plus the half tax credit £1,055,555.55

e) 5 per cent of the aggregate amount £52,777.77

Amount payable to the direct investor company (amount at (c) less amount at (e)) £2,777.78

Claim forms

Please select your country of residence from the list below. Some of the forms can be downloaded from this website.

There is no longer any need to send tax vouchers with the completed claim form, but you should keep them safe in case they are needed later to support the claim. HMRC will change the information about vouchers on the forms and notes as soon as they can.

Claim forms for direct investor companies

For direct investor companies in Belgium, Italy, Luxembourg or Sweden the claim forms are available from HMRC's Large Business Service DT Treaty Team Helpline on Tel + 44 115 974 0897 (if calling from outside the UK) or Tel 0115 974 0897 (if calling from the UK).To make sure that you get the correct claim form please:

  • give the company's full name and address
  • say that it is a direct investor company receiving UK dividends