LMA welcomes UK Government's announcement of a new withholding tax exemption in respect of private placements
23 December 2015The LMA welcomes the regulations laid before parliament finalising the new exemption from withholding tax for interest on private placements. The exemption will take effect from 1 January, and follows discussions between HM Treasury, HMRC, the LMA and other interested parties.
The LMA is pleased to note the UK Government's recognition of private placements as a debt product in their own right, as well as its commitment to encouraging the provision of longer-term finance by non-bank investors generally. The LMA particularly welcomes the fact that the new regulations are short and relatively straightforward, and should benefit most private placements where investors are not based in tax havens.
Clare Dawson, Chief Executive of the LMA said:
"The new exemption removes an impediment to private placements becoming a key debt product in the portfolio of non-bank investors and an important funding source for borrowers. The exemption should also open up the UK market to Asian investors, who have previously struggled to invest in UK unlisted debt without suffering an uneconomic level of withholding tax."
"We would like to thank HM Treasury and HMRC for what was a constructive engagement with industry, and which has created an exemption which should help create a fully functioning private placement market."