The following Personal Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
Income and gains may be taxable in more than one country. The UK has three ways of ensuring that the individual does not bear a double burden:
treaty tax relief may reduce or eliminate the double tax
if there is no treaty, the individual can claim ‘unilateral’ relief by deducting the foreign tax from his UK tax
he can also deduct the foreign tax as an expense from his income (known as relief by deduction), although this is generally less efficient
This guidance note looks at these three options in turn, and then considers how the reliefs should be used efficiently for income tax and capital gains tax (CGT) and how they should be reported for Self Assessment. It does not cover remittance basis users. For this, see Simon’s Taxes E5.318.
HMRC guidance on a country by country basis is given in DT2140PP.
Before claiming foreign tax credits, you should note that the individual can only make a claim if he has taken all reasonable steps to have his foreign liability reduced to a minimum.
This includes claiming, or securing the deduction of, all allowances, reductions, reliefs and deductions which he might have reasonably expected to have claimed or secured if no foreign tax relief claim was open to him.
Examples of such reliefs might be personal allowances in the overseas country, deductions for expenses, etc.
Next, you should consider the provisions of the relevant tax treaty. There is a list of current UK treaties in force on the GOV.UK website. You may also wish to read the Structure of a tax treaty guidance note, as this provides some help with interpretation.
You should first check that the taxpayer falls within the provisions of the treaty – for instance, most treaties require that the individual is resident in the jurisdiction, while some also have references to nationality.
**Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason.
Access this article and thousands of others like it free for 7 days with a trial of TolleyGuidance.
Read full article
Already a subscriber? Login
Terminal loss relief for trade losses in the final 12 monthsTrading losses incurred by a company in the final 12 months leading up to the discontinuance of trade may be carried back for up to three years from the period beginning immediately before that 12-month period. So if the final accounting
What is structures and buildings allowance (SBA)?From 29 October 2018, expenditure on constructing a non-residential building or structure, or in certain cases, expenditure on acquiring such a building or structure, qualifies for an SBA. The following note has been updated for the changes announced
Business asset disposal relief (previously known as entrepreneurs’ relief) is a capital gains tax (CGT) relief that allows business owners with chargeable gains on qualifying business assets to pay CGT at a rate of 10%. For disposals made on or after 11 March 2020, the relief is available on up to
Preparatory workBefore completing the Inheritance Tax account for submission to HMRC, the practitioner needs to undertake a comprehensive review of the extent of the estate and its proposed distribution. The work required leading up to the submission of the account is described in detail in the
To view our latest tax guidance content, sign in to Tolley Guidance or register for a free trial.