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HMRC internal manual

International Manual

UK residents with foreign income or gains: corporation tax: Loan relationships: credits on non-trading loan relationships

TIOPA10/S50 applies to credits on non-trading loan relationships. It addresses the situations described in INTM167140 where it is not possible to identify a profit with particular credits which have suffered foreign tax and where entitlement to credit relief would otherwise be lost if there is a deficit.

If credit relief is not claimed the foreign tax may (subject to INTM167210) be treated as reducing the amount of the credit relating to the interest under TIOPA10/S112, thereby reducing the profit or creating or increasing a deficit. No special rules are necessary to ensure that Section 112 operates satisfactorily in this respect.