On 13 December 2007, an order was laid before the House of Commons, clarifying that withholding tax does not apply to interest to the extent that the interest falls within the UK transfer pricing rules and the payee elects under those rules for the excessive interest to be exempt from UK tax. This means that, where tax deductions are denied for interest on the basis that it is excessive, subject to the payee making an election, there will be no UK withholding from the excessive part of the interest.

The regulations also correct several minor errors in the Income Tax Act 2007.