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HMRC internal manual

International Manual

HM Revenue & Customs
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UK residents with foreign income or gains: double taxation relief: Limit to amount of tax credit relief

TIOPA10/S36, S40-S42 limit the amount of tax credit relief which can be allowed against UK tax. In general terms these sections provide that:

  1. credit against UK tax for foreign tax on income from a foreign source must not exceed the lesser of:

i) the foreign tax, and

ii) the UK tax on the UK measure of the doubly taxed income

  1. the total credit against UK income tax for any year of assessment must not exceed the total UK income tax payable by the claimant for the year less tax on any charges.

However, see INTM164210 onwards for treatment of the foreign tax on dividends paid on or after 31 March 2001.