UK residents with foreign income or gains: corporation tax: Loan relationships - relief for foreign tax - identification of UK tax - Example 7
There are credits relating to interest which has suffered foreign tax but a Loan Relationship deficit overall, part of which the company surrenders as group relief or carries back or forwards to other accounting periods under CTA09/S459 or CTA09/S457:
The figures are as in example 5 (see INTM167290). The company claims to treat £400 of the deficit in one or more of the ways indicated and claims relief for the balance of £600 against other profits of the accounting period under CTA09/S459.
For the purpose of allowing credit relief in respect of the foreign interest of £500 the computation is restated to show UK tax chargeable on the credits of £500 + £600 + £800 and to show separately debits of £2,500 (that is, the aggregate of the debits of £2,900 less £400 which is the amount of the deficit to which the claims for relief under CTA09/S459 and S457 relate) which are then treated as available to be set against profits of any description for that accounting period under TIOPA10/S52. Taking account of other profits for the accounting period the result would be as follows
|Trade||Loan Relationship||Property Income||Foreign dividend||Total|
|Restated as||Trade||Loan Relationship (i)||Other Loan Relationship||Property Income||Foreign dividend||Total|
|less Loan Relationship debits (ii)||(600)||(1,400)||(500)||(2,500)|
i) see note (i) to example 1.
ii) see note (ii) to example 5. In this example debits of £600 must be set against the profits identified in the claim under CTA09/S459.