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ITA 2007, s 874 requires tax to be deducted from specified payments of yearly interest:

1. Ìý

   •ÌýÌýÌýÌý by a company

2. Ìý

   •ÌýÌýÌýÌý by a local authority

3. Ìý

   •ÌýÌýÌýÌý by or on behalf of a partnership of which a company is a member, or

4. Ìý

   •ÌýÌýÌýÌý by any person to a person whose usual place of abode is outside the UK

This is discussed further at A4.424. Domestic exceptions from the requirement are covered at A4.425. This article discusses relief from the duty to deduct withholding tax where the interest is paid to a non-UK resident company under the terms of a double tax treaty. Where the treaty between the UK and the country in which the recipient is resident includes the necessary provisions, the recipient can make an application for tax to be deducted at source by the payer at the treaty rate rather than at the basic rate. The UK payer of the interest can then apply the treaty rate once it is in possession of a formal written