Jurisdiction(s):
United Kingdom

UK tax checklist for distressed corporate debt: acquisitions of non-performing loans, restructurings and enforcement

Published by a LexisNexis Tax expert

Checklists

This checklist highlights the principal tax considerations when handling distressed corporate debt, addressing in turn:

acquisitions of non-performing loans
debt restructurings (ie waivers, debt/equity swaps and renegotiations)
enforcement of debts

For fuller analysis of the points signposted here, see Practice Notes:

Tax and distressed debt—acquisitions of non-performing loans
Tax and distressed debt—debt restructurings
Tax and distressed debt—enforcement actions available to creditors

Acquisitions of non-performing loans

This part summarises the tax considerations when a buyer takes on existing UK debt at a discount to face value:

Where should the purchaser be located?
- will interest paid by the borrower to the purchaser be subject to withholding tax?
- if the purchaser is non-UK resident, can relief be obtained under a double tax treaty?
- to what extent will amounts received from borrowers be chargeable on the purchaser?
How will the debt be serviced?
- where the purchaser is outside the UK, could UK servicing arrangements in relation to the debt create a UK permanent establishment of the purchaser?

These considerations frame the key tax implications for parties dealing with UK distressed debt transactions…

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Jenny Doak

Weil Gotshal & Manges LLP

Jenny is a partner in Weil's European Tax practice. Her experience includes restructurings, M&A transactions (private and public), joint ventures, financings, debt and equity capital markets, and special situations. Jenny advises across all sector areas, but has particular experience in certain specialist areas, including energy and TMT. Alongside her transactional practice, Jenny provides consultancy advice to clients on standalone tax matters. She also represents clients in tax litigation....

Web page updated on 20/05/2026

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