Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

International Manual

HM Revenue & Customs
, see all updates

UK residents with foreign income or gains: double taxation relief: Statutory income basis

Where a claim in respect of a particular source of income is made for any year on the statutory income basis, where this still applies, the claim will be accepted if the person agrees to adopt this basis for all years which are in date for adjustment and for which it can be applied. Where the taxpayer wishes to apply the statutory income basis for one or more, but not for all, the years affected, the case will be examined to see whether the claim results in substantially more relief than would have been given for the period if either the root income basis or the statutory income basis had been applied consistently throughout. If it does, the taxpayer will be told that one basis must be applied consistently and asked to say which basis should be adopted.

In any case where a claim in respect of a particular source of income has been settled on the root income basis and the taxpayer wishes to re-open the claim to obtain relief on the statutory income basis and the agreement allows him to do so, the claim will be admitted to re-open and deal with the relief in accordance with the instructions in the preceding paragraph, provided that the adjustment is claimed within four years after the end of the year of claim. (Previously the time limits were for years up to 1995-96 - within six years after the end of the year of claim and for 1996-97 to 2005/06 - within five years and ten months after the end of the year of claim).

Where a taxpayer has claimed relief on the statutory income basis, he should be advised that, should the relevant agreement be revised so as to give credit on the root income basis, or he wishes to change from a statutory income basis to a root income basis, credit will not be given for any year for foreign tax by reference to which relief has already been given for another year on a different basis. For example, a `statutory income basis’ agreement is replaced by a `root income basis’ agreement which has effect for 1993-94 onwards. A taxpayer has been given relief on a statutory income basis for foreign tax of 30 charged on 1992-93 income of 150 against the UK tax on a 1992-93 assessment of 120 (income of 1991-92). For 1993-94, when the root income basis applies, the assessment will be on 150 but no credit will be due for the 1992-93 foreign tax for which credit has already been given.

In any case where there is difficulty in calculating the amount of credit on the statutory income basis, the file should be submitted to Specialist Personal Tax, PT International in the case of individuals and to CTISA Business International in all other cases.