Jurisdiction(s):
United Kingdom

Key definition

Lender definition

What does Lender mean? In legal practice, a lender is the party that advances money or otherwise extends credit to a borrower under a loan or facility agreement, to be repaid (usually with interest and fees) on agreed terms. Lenders include banks, building societies, finance companies, credit funds and syndicates (often acting through an agent and security trustee). “Lender” is a descriptive term used across financing contexts rather than a term generally defined in statute. Legislation and regulation more often use “creditor” or define specific categories (for example, regulated mortgage lending and consumer credit), for which authorisation and conduct rules apply in the...

UK bank cross-border lending: withholding tax, treaty relief and processes, loan relationship taxation, stamp and VAT, FATCA, bank levies, financial transaction taxes

Published by a LexisNexis Tax expert

Practice notes

A UK tax resident bank should weigh the following tax matters when extending credit to an overseas Borrower:

local withholding taxes, including:
- the Lender’s entitlement to double tax treaty (DTT) relief; and
- the procedure required to access DTT relief
UK tax treatment of the loan
stamp, transfer, registration and comparable taxes
value added tax (VAT)
the US Foreign Account Tax Compliance Act (FATCA) and analogous regimes worldwide
bank levies
financial transaction taxes

Local withholding tax and a lender’s ability to claim double tax treaty relief

Local withholding tax

A principal tax point for a UK lender financing a non-UK borrower is whether any overseas withholding will cut the interest actually received and, if so, whether that charge can be reduced or removed through local exemptions or DTT relief. Provided the loan has not been arranged so the interest arises from a UK source, UK withholding tax should not come into play; and even if it does, it ought to have little practical impact given the lender’s UK tax residence and...

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Alex Rigby

Skadden

Alex Rigby represents a broad range of clients on U.K. and international tax matters. His practice includes representing clients on high-value tax controversy matters, including enquires by the U.K. revenue authorities, transfer pricing disputes and competent authority work such as APAs and MAPs. He also advises on a range of transactional tax matters, including public and private mergers and acquisitions, joint ventures, equity and debt issuances, demergers and restructurings, generally with an international component.In recognition of his work on contentious matters, Mr. Rigby was named a Rising Star in Tax Controversy in ITR World Tax 2025 edition.Mr. Rigby contributes to a number of Skadden’s pro bono projects, and has advised various individuals on their appeals against benefit decisions by the Department for Work and Pensions....

Jisun Choi

Skadden

Jisun Choi advises a wide range of clients, including multinational corporations in various industries, private equity funds and financial institutions, on international and U.K. corporate tax matters, with a particular transactional focus on mergers and acquisitions and group restructurings, as well as associated financings.Ms. Choi’s practice involves structuring and advising on the tax aspects of:• private and public acquisitions and disposals of businesses, including management buyouts, sales of businesses in administration and auction sales• international group holding structures, including on joint ventures, the use of the U.K. as a holding company jurisdiction, and investment and asset management structures• group reorganisations and restructurings, including de-mergers of businesses and post-acquisition integration planning• capital market transactions, including initial and secondary listings of equity and debt instruments, and return of value to shareholders• banking and derivative transactions, including bank credit facilities and private placement arrangementsIn addition, Ms. Choi has...

Web page updated on 21/05/2026

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