INTM584020 - Thin capitalisation: third-party loan agreements: Syndicates of lenders
It is quite common for a number of lenders to form a syndicate to provide the funds for a large loan, so that no single lender is too exposed to risk in relation to the finance. The syndicate members are often resident in the same country, but that is not always the case. Syndicated loans are normally made by third-party lenders, although there may be guarantees from connected parties which bring the financing within the ambit of ICTA88/SCH28AA.
When the syndicate is providing a loan for a UK group or company and at least one of the syndicate members is resident overseas, then an application for treaty clearance to the DT Treaty Team at LBS Nottingham (previously CAR Residency) may well need to be made (details from INTM574000). If the syndicated loan has a syndicate manager, then it may be dealt with under the Provisional Treaty Relief Scheme - see INTM574020.
If there is no syndicate manager, each of the foreign members of a syndicate will need to apply for treaty clearance to pay interest gross or at the treaty rate.