Double taxation relief: individual Names: making DTR claims
The Lloyds SA tax return
To simplify working out the amount of foreign tax in the Lloyds foreign tax pool,a special section (Part 4) of the Lloyds Pages of the SA return brings together allthe elements of foreign tax suffered on Lloyds income for the year. By following theinstructions for completing that section, the entry at 3L.78 (or 1L.78 for Trust andEstate Returns) gives the total amount in the foreign tax pool for the year. To claimrelief for this pool of Lloyds foreign tax against UK tax (i.e. tax credit relief),Names complete the Foreign Pages of the SA return.
Where relief is claimed by deduction, this is done by including the total amount of theLloyds foreign tax pool as a deduction from the trading results for the year. TheLloyds SA Pages have special boxes to allow Names to claim DTR by deduction. In the2005-06 Lloyds Pages these boxes are at 3L.90, where the result before deduction offoreign tax is a profit, and 3L.83 where the result before deduction of foreign tax is aloss.
Tax credit relief: the SA Foreign Pages
The self assessment Foreign Pages require the taxpayer to work out the UK tax onprofits arising on a country by country basis. This is incompatible with the pooling basiswhich operates for Lloyds foreign tax. Instead, Names are asked to make claims fortax credit relief for the Lloyds foreign tax pool as below
- Column A - enter Lloyds instead of the name of the foreign country where the income arose
- Column D - enter the total amount in sterling of foreign tax paid on Lloyds income, using the exchange rate prevailing at the date the income was received to translate the foreign tax to sterling
- Column E - enter the total profits from membership of Lloyds.
The Lloyds pool of foreign tax is then included in the total foreign tax for theyear (in box 6.9) and then the standard procedures can be followed to complete the claim,bearing in mind that for tax credit relief purposes, the total profit from Lloyds(box 3L.91) is regarded as one item of income and foreign tax paid on Lloyds incomeis regarded as foreign tax on that item of income.
Foreign Pages Working Sheet
Names who have a choice over claiming relief by deduction or as tax credit relief mayseek help in completing the Working Sheet in the Foreign Pages. The amount of foreign taxto include is the total amount of the Lloyds foreign tax pool for the year (box3L.78 in the 2005- 06 Lloyds Pages), with no apportionment between different sourcesof foreign tax on Lloyds income. If the Foreign Pages are completed to claim taxcredit relief for foreign tax on Lloyds income, there should be no entries (or onlyzeroes) in boxes 3L.83 and 3L.90 (these boxes allow Names to claim relief for foreign taxby deduction).