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HMRC internal manual

International Manual

Double taxation: concept and principles: UK enabling legislation - relief under double taxation agreements

TIOPA10/S6 provides that double taxation agreements made by the United Kingdom with any territory outside the United Kingdom shall have effect for the following purposes:

  1. for relief from Income Tax or Corporation Tax on income,
  2. for charging United Kingdom source income arising to non-residents,
  3. for determining the income to be attributed to non-residents and their branches etc. in the United Kingdom and to United Kingdom residents who have special relationships with non-residents, and
  4. for giving non-residents the right to a tax credit on distributions made by a United Kingdom resident company.

TIOPA10/S6 covers:

Income Tax and Corporation Tax in respect of income or chargeable gains, and also for:

  • Capital gains and Capital Gains Tax; and
  • Petroleum Revenue Tax.

Double taxation agreements made under Section 6 are of two kinds

  1. comprehensive agreements, which deal with income of all descriptions and capital gains, and
  2. limited agreements which only deal with shipping and/or air transport profits.

Double taxation agreements are incorporated as Schedules to Orders in Council and are published as Statutory Instruments. See INTM157020.

A more detailed description of the contents of a double taxation agreement is given in INTM153010 onwards. The full text of individual agreements along with a summary is provided at DT1200PP onwards. The text of the agreements which have most recently entered into force is to be found on the International internet site.