The monthly review of tax issues affecting the City, by Mark Middleditch (Allen & Overy).
Withholding tax on peer-to-peer (P2P) lending
On 8 January HMRC published Revenue and Customs Brief 2/2016 on the deduction of income tax at source from payments of P2P interest. P2P involves individuals and businesses lending to each other through the intermediary of an internet platform which arranges and manages the loan. The ‘many-to-many’ P2P lending model allows lenders and borrowers to benefit from better rates than those available from banks.
Under current rules there is of course a requirement to deduct income tax at source from payments of yearly interest. Whether a withholding tax obligation will apply in this way will depend on the identity of the lender and the borrower. The application of the rules is particularly complex...
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The monthly review of tax issues affecting the City, by Mark Middleditch (Allen & Overy).
Withholding tax on peer-to-peer (P2P) lending
On 8 January HMRC published Revenue and Customs Brief 2/2016 on the deduction of income tax at source from payments of P2P interest. P2P involves individuals and businesses lending to each other through the intermediary of an internet platform which arranges and manages the loan. The ‘many-to-many’ P2P lending model allows lenders and borrowers to benefit from better rates than those available from banks.
Under current rules there is of course a requirement to deduct income tax at source from payments of yearly interest. Whether a withholding tax obligation will apply in this way will depend on the identity of the lender and the borrower. The application of the rules is particularly complex...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
