Posted on:Guarantee Arrangements, Insights
Although guarantees are common, the tax treatment of guarantee arrangements can be complex. However, before jumping to the tax analysis, it is first important to understand the nature of the guarantee arrangements and their legal effect. Once the legal nature of the various guarantee relationships are understood, the tax analysis can be applied. However, even then difficulties can emerge in determining the tax effect of guarantee arrangements given the lack of case law, guidance and legislative provisions specific to guarantees.
Jenny Doak and Stuart Pibworth revisit some of the key UK corporation and withholding tax considerations to consider on guarantees of financial obligations.
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Originally published in Tax Journal Magazine, Issue 1486, May 2020