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HMRC internal manual

International Manual

UK residents with foreign income or gains: corporation tax: Foreign life fund

This guidance applies only for accounting periods ending on or before 31 December 2006 (for corporation tax) and income tax years to 2006/07

For Corporation Tax, ICTA88/S441 provided for the treatment of income of foreign life assurance funds to be assimilated in certain respects to the treatment of income of non-residents. Accordingly, where Corporation Tax was payable in respect of overseas income of the foreign life assurance business on the basis of the amount received in the UK, the amount remitted was increased by the overseas tax falling to be taken into account in determining the credit to be allowed against the Corporation Tax on the income under ICTA88/S788 or ICTA88/S790. The overseas tax taken into account included any underlying tax attributable to a dividend but did not include `tax spared’ under ICTA88/S788 (5) (see INTM161270).

See the Life Assurance Manual for guidance on relief for foreign tax paid by life assurance companies for periods beginning on or after 1 January 1990.