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The Upper Tribunal’s decision in Ardmore Construction on the multi-factorial test in determining the source of interest.
KEY POINTS
- Lord Hailsham’s multi-factorial test in the National Bank of Greece case applies to the source of interest.
- Decision supports HMRC’s Savings and Investment Manual (SAIM9090).
- Court disagreed that the residence of the debtor and the location of their assets are most important.
- Residence is only one factor.
- Will HMRC revise its guidance in SAIM9090?
The question of when an interest payer must withhold UK income tax on the sum seldom comes before the courts. In the recent Upper Tribunal decision of Ardmore Construction Ltd and others v CRC [2015] UKUT 633 the judge gave weight to the residence of the debtor and the source of payments in determining the source of interest disregarding the lender’s residence and the place where credit is provided. The tribunal applied Lord Hailsham’s multi-factorial test in Westminster Bank Executor...
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