Unused Double Taxation Relief carried forward

Hi Last year our corporation tax liability was less than the withholding tax suffered in a country with a double taxation treaty (Malawi). Therefore we had unused Double Taxation Relief carried forward. Can you please confirm if I am able to utilise this loss against this years corporation tax liability in its entirety? Or can the carried forward balance only be offset against this years profit as an expense? Thanks, Steve

Hi Steven,
DTR cannot be carried forward (or back) except in specific circumstances.                               
1.where the foreign tax is “eligible unrelieved foreign tax” arising on a dividend received by a UK company or
2.where foreign tax is payable on the profits of an overseas branch and  not all of it can be utilised by way of credit against the UK tax chargeable on that year’s branch profits (see INTM163040).
Please see:
INTM161150 - UK residents with foreign income or gains: double taxation relief: Repayment, carry forward
For more information. 


 

Hi Thanks for your reply but the advice provided is for individuals and this relates to Consultancy fees provided by a UK Limited company to a Malawian company. Apologies for the misunderstanding. I have been led to believe in this case that the unused DTR can be carried forward. But am unsure whether we can utilise the carried forward amounts against this years corporation tax liability in its entirety, or must the carried forward balance only be offset against this years profit as an expense in the P&L? Thank you

Hi,
The guidance to which we referred you also applies to companies. 
If you need to discuss this further with us, we are going to need more information about the company concerned.
Please write to us at Corporation Tax Services, HMRC, BX9 1AX. 
Thankyou