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HMRC internal manual

Capital Gains Manual

Double Taxation Relief

It is very unlikely that a beneficiary will be able to claim tax credit relief against the Capital Gains Tax due on a section 87 gain. This is because relief is given for foreign tax charged on the same gain. This applies whether the relief is given under the credit Article in a double taxation agreement, TIOPA10/S18(1), or unilaterally under TIOPA10/S9(2).

Because of the pooling of trustees’ section 2(2) amounts and the matching and possible of apportionment of capital payments it is not possible to identify the gain assessable on the beneficiary with the gain that accrued to the beneficiary.

If tax credit relief is not due foreign tax paid by the trustees may be deducted in calculating the trustees’ section 2(2) amount, TIOPA10/S113.