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HMRC internal manual

International Manual

UK residents with foreign income or gains: double taxation relief: Same income

The credit Article in an agreement and the corresponding provision for unilateral relief in TIOPA10/S9 are concerned with relief from double taxation on income or gains. For credit to be allowed, it is not a requirement that the foreign tax on income or gains has to be borne by the same person who is liable to UK tax on the same income or gains. For example, if the foreign country taxes a settlor on the income of a UK resident beneficiary, who is chargeable to UK tax on that income, credit may be given to the beneficiary for the foreign tax paid by the settlor. However, it must be the same income which is being taxed in both countries. See alsoStatement of Practice SP6/88 and INTM169040 in the capital gains context.

Where directors’ fees are treated as income of a partnership or of a company under ESC/A37 tax credit relief is available to the partnership or company, regardless of the fact that the foreign tax may have been suffered by the director.