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HMRC internal manual

General Insurance Manual

Double Taxation Relief: background: types of foreign tax suffered

Foreign tax suffered by companies carrying on general insurance business will generally be either

  * tax paid by them in relation to profits of an overseas branch; or
  * withholding tax on dividends, interest, rent etc. paid to them by overseas companies.

Relief for foreign tax may, on a claim, be given by way of credit against corporation tax. In the absence of a claim for credit, foreign tax may be relieved as an expense or as a reduction of income. Although it is not usually possible for foreign tax on the same item of income to be relieved partly as credit and partly as expense, there are certain exceptions to this rule for general insurance companies.