Update - UK Withholding Tax - Supreme Court Judgment - 15 March 2019

On 13 March 2019, the UK Supreme Court handed down its judgment in the UK Withholding Tax Application and published a statement of its conclusions.

A copy of the judgment can be found here and a copy of the Court’s summary of conclusions can be found here.

In summary: The Supreme Court has unanimously held that statutory interest payable under the Insolvency Rules constitutes “yearly interest” for the purposes of UK withholding tax if there is more than a year between the commencement of the insolvency and the payment of proved debts. In the case before the Court, which arose in the context of the lengthy administration of Lehman Brothers International (Europe), this period was around four to six years. Accordingly, the statutory interest payments in this case constitute “yearly interest” and UK withholding tax applies.

Lord Briggs summarised the Court’s conclusions briefly at the handing down of the judgment on 13 March 2019 and a copy of the recording can be found here.

Should you have any queries regarding this update, please contact LBIE’s Communications and Counterparty Management team at generalqueries@lbia-eu.com.