The double taxation treaty passport scheme allows for double taxation relief on UK loan interest payments made by a UK corporate borrower to overseas corporate lenders.
A double taxation treaty passport can be applied for by a company (or its head office) where the following applies:
- is resident in a country that has a double taxation treaty with the UK;
- is an overseas corporate lender;
- took out a loan on or after 1 September 2010.
HMRC may also issue passports to US limited liability companies and US corporations that elect to pass corporate income, losses, deductions and credits to their shareholders for federal tax purposes.
Once processed, a passport status will usually last for five years. HMRC may carry out a review of any scheme to check it is being operated correctly. The list of overseas lenders who are recognised passport holders was updated on 28 June 2019 with 18 additions and 2 amendments.