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HMRC internal manual

Tax Credits Manual

From
HM Revenue & Customs
Updated
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Eligibility - income (calculation): Income calculation - general rules (Info)

Any income arising from outside of the UK shall be taken into account in calculating entitlement to tax credits irrespective of the customer’s domicile or residence, or the claim of any double taxation agreement, where a customer or partner is

  • resident in the UK but isn’t ordinarily resident or domiciled in the UK

or

  • resident and ordinarily resident but not domiciled in the UK.

Follow the guidance in TCM0128000.

Taxable income should include any sum that would be taxable if the customer were resident and ordinarily resident and domiciled in the UK.

This provides that the overseas income of individuals who are resident but not domiciled in the UK for tax purposes shall be taken into account in working out their total income for tax credits purposes, subject to the provisions of the rules governing foreign income.

Follow the guidance in TCM0120000.

Where the customer or partner receives income from a territory outside of the UK from which monies can’t be removed, that income should be disregarded in calculating income for tax credit purposes.

For example: Mr J has income from employment in the UK of £18,550, he is also a part owner of a property in Zimbabwe that is rented out. Transfer of Mr J’s money from Zimbabwe is prohibited. The income of Mr J for tax credits purposes is £18,550.