Update – UK withholding tax application - Announcement of LBIE Tax Creditor Sub Group – 18 December 2018

On 18 April 2018 the Joint Administrators issued an announcement confirming i) the UK income tax (“WHT”) treatment on the payment of statutory interest following the Court of Appeal judgement handed down on 19 December 2017; and ii) the HMRC position with regard to the process creditors should follow if they are able to benefit from a reduced WHT rate under a double tax treaty, a link to which can be found here.

LBIE is aware that many creditors who have submitted a treaty application to HMRC (to receive the LBIE statutory interest at a reduced WHT rate), have not yet obtained clearance from HMRC on their application.  Creditors have therefore not received a repayment of some/or all of the WHT suffered on the statutory interest payments made to them in the summer.

HMRC have advised that they are reviewing the applications on a case by case basis and obtaining further technical advice on several themes arising from these applications. It is not clear when clearances will be given by HMRC and therefore the timing of tax repayments to creditors is not certain.

Certain creditors have requested that LBIE form and facilitate the working of an interest group.  There may well be benefit in creditors exploring the opportunity to act in a coordinated way to expedite the resolution of this issue.

If creditors are interested in participating in such a group they should contact LBIE at generalqueries@lbia-eu.com by 7 January 2019. LBIE will then facilitate a discussion with interested parties so that they may agree how they wish the group’s work to be defined and taken forward.

Finally, we remind creditors that the Supreme Court hearing on this matter is listed for 12th February 2019 and we will provide updates to all creditors at appropriate times.