London: +44 (0)20 7236 2601
St Albans: +44 (0)1727 869141
Rickmansworth: +44 (0) 1923 771010
Milton Keynes: +44 (0)1908 605552

Tax treatment of compensation on interest rate hedging products

HMRC has amended its guidance on redress payments from banks for Interest Rate Hedging Products.

The guidance assists businesses in establishing the tax position on these payments.  The payment is generally taxable because tax relief would have been claimed on the payments.  The interest element should be taxed as interest rather than as trading income.

The guidance also highlights that under certain circumstances, such as when a business has stopped trading or when the product was for a non-business loan, the tax treatment of the payment will be different and advice should be sought.

 

 

Date: 3rd December, 2014
Author: Cathy Corns

SHARE THIS

Articles from this Author

4th April, 2018
EMI options - a current risk

20th March, 2018
Beneficial loans

20th March, 2018
IR35 consultation

20th March, 2018
Tax codes

Contact Business Service Partners

Choose from the drop down menu below to select a Partner to contact.

Tweet

Mercer & Hole Chartered Accountants support @alzheimerssoc as their charity of the year bit.ly/2EJbtw5 pic.twitter.com/3KLTdzwPnD

Jamie Wooldridge to speak at the Business Accelerator Summit MK bit.ly/2qih6wf @brightbizadvicetwitter.com/i/web/status/9…

Follow

LinkedIn

For the latest Mercer & Hole news, visit our LinkedIn page mercer-&-hole

Click here to follow us on LinkedIn