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HMRC internal manual

International Manual

From
HM Revenue & Customs
Updated
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UK residents with foreign income or gains: dividends: Dividends received by UK companies on or after 31 March 2001: eligible unrelieved foreign tax - order of use

The legislation relating to onshore pooling was repealed for distributions paid on or after 1 July 2009.

Relievable tax may be either underlying tax or withholding tax.

ICTA88/S806F sets out the order in which credit should be given. As far as the amounts allow this should be:

  1. underlying tax (where allowable) ;
  2. withholding tax;
  3. underlying tax that arose in a different accounting period, i.e. amounts ‘treated as underlying tax’ under ICTA88\S806D(4); and finally
  4. withholding tax that arose in a different accounting period, i.e. amounts ‘treated as foreign tax other than underlying tax’ under ICTA88\S806D(5).

Where the amount of foreign tax to be credited is subject to any limitation or restriction this is deemed to have the effect of excluding foreign tax other than underlying tax before excluding underlying tax.