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HMRC internal manual

Capital Gains Manual

Computation: foreign tax and double taxation relief: tax credit relief

TIOPA 2010/S31

If gains chargeable to UK Capital Gains Tax or UK Corporation Tax on capital gains have also been charged to tax in another country, the person making the disposal may claim tax credit relief in respect of the foreign tax suffered. See INTM169010+. If such a claim is made the tax credit relief is deducted from the part of the Capital Gains Tax or Corporation Tax payable in the UK which relates to that gain.


A non-domiciled individual chargeable on the remittance basis who makes a chargeable gain on the disposal of an asset situated outside the UK is only liable on the amount of the gain remitted to the UK (TCGA92/S12 see CG25300 onwards).

When such an individual is chargeable on the gain remitted to the UK and claims credit for foreign tax charged on the same gain, the liability in the UK will be on the sum of the amount remitted to the UK plus the foreign tax attributable to the amount remitted.

Where less than the full amount of a doubly taxed gain is remitted or the gain actually assessed in the other country is a different amount you may need to consider making an appropriate apportionment of the foreign tax to arrive at the amount related to the remitted gain, see CG14395. This amount should then be added to the amount of the remitted gain to arrive at the amount assessable. The same figure of foreign tax will be the figure allowable as tax credit relief.

Any difficulty in determining the correct addition for the foreign tax, should be referred to the Personal Tax International (part of Specialist Personal Tax). (INT169080).

Whether gain doubly taxed

Prior to the issue of HMRC Brief 17/10 on 19 March 2010 our practice was to restrict the amount of FTCR if different periods of ownership of the asset are considered when arriving at the gain assessable in the UK and the foreign gain, or if the amount of the UK gain is less than the foreign gain. Our practice after that date was revised so that the whole of the foreign tax is allowable as FTCR up to the amount of the UK tax on the gain.

This change brought the chargeable gains practice in line with the Income Tax practice, which does not restrict the amount of FTCR allowed where the amount assessed in the UK is less than the amount of income assessed to foreign tax. More detailed guidance can be found in INTM169010+.

Further guidance on the practice that applied before 19 March 2010 is no longer included in this manual. If you need to consider the earlier guidance then this is available from commercial tax information tax packages or directly from Capital Gains Technical Group.

Additionally the National Archives provides a way to get to previous HMRC guidance. See the ‘updates to this guidance’ link in the Main Contents page.