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RF 12D: Determining amount of non-resident financial arrangement income
or “Calculating income from loans to related parties”
You could also call this:

“When income from overseas financial arrangements is considered paid”

When you have non-resident financial arrangement income, it’s treated as being paid at a specific time. This time is usually the last day of the second month after the end of the borrower’s income year.

However, there’s a special rule for related-party debt. If the debt matures, ends, or stops being a related-party debt during the borrower’s income year, the income is treated as paid on a different day. In this case, it’s the last day of the second month after the event that changed the debt’s status.

For example, if the borrower’s income year ends on 31 March, the income would normally be treated as paid on 31 May. But if the related-party debt ended on 1 December, the income would be treated as paid on the last day of February.

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Next up: RF 12F: Adjustments: first year additional amounts

or “Calculating additional income from overseas loans in the first year”
Next

Part R General collection rules
Withholding tax on non-resident passive income (NRWT)

RF 12EWhen non-resident financial arrangement income treated as paid

  1. An amount of non-resident financial arrangement income is treated as paid on the last day of the second month following the end of the borrower’s income year.

  2. Despite subsection (1), if a related-party debt matures, ends, or no longer qualifies as a related-party debt during the borrower’s income year, the non-resident financial arrangement income is treated as paid on the last day of the second month following the relevant event.

Notes
  • Section RF 12E: inserted, on , by section 279 (and see section 5) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).