Foreign Tax Credit Relief / DTAA / on Capital Gains / On sale of a house in India

On sale of house in India, the Indian tax authorities have deducted a huge amount of capital gains tax (CGT) Now under self assessment, when I report the said capital gains to UK HMRC, wont UK HMRC deduct the capital gains tax already paid in India / already taken off ? On the self assessment form, for foreign income, UK HMRC does take off the foreign tax for Interest income and rental income but for Capital Gains tax on the self assessment form, I could not even find a text-box where I could enter the amount of tax taken off in India. Is this normal ? for CGT, does UK HMRC completely ignore the CGT paid in India ?

Hi Admin @HMRC -- I found this field on the SELF ASSESSMENT FORM Tax adjustment to 2022-23 capital gains Adjustment to Capital Gains Tax: (optional) Should I enter the amount of CGT deducted by India, over here?

Dear HMRC ADMIN, Today I made another attempt at the Self Assessment Form and used the Capital gains worksheet Capital gains computation worksheets THERE ARE THREE FIELDS ( TEXT BOXES ) WHERE I CAN POSSIBLY PUT THE AMOUNT OF CAPITAL GAINS TAX PAID IN INDIA: 1) Deduction, if any, in respect of reliefs and elections: (optional) 2) Allowable costs (including purchase price) 3) Tax adjustment to 2022-23 capital gains Most probably I should use the third field - "Tax adjustment to 2022-23 capital gains" as the help text states that "You may need to enter a net adjustment figure here if: your capital gains has Foreign Tax Credit Relief" and to enter that as a NEGATIVE AMOUNT Is that right ? Can you please confirm ? I know there is time until 31-Jan-2024 but would appreciate a prompt reply as I need to ensure that funds are available to pay the CGT to HMRC UK.

Hi,

You will need to claim Foreign Tax Credit Relief of up to 100% of the tax deducted in India. If you are completing a paper tax return, you will need SA106 (foreign) and SA108 (capital gains) and submit with SA100.

Self Assessment: Foreign (SA106)

Self Assessment: Capital gains summary (SA108)

You report the capital gains on SA108 and again in SA106, so that you can claim Foreign Tax Credit Relief. If you are completing an online tax return, you will need to go to '3 - tailor your return' and select the options for capital gains and foreign income/gains.  In '4 - Fill in your return', you will enter your capital gains details.

Thank you.  

Thanks HMRC Admin 32. However I still have a query. I am doing SELF ASSESSMENT and I have already gone to "3-Tailor your return" and to "4-Fill in your return" and ENTERED the capital gains using the "Capital gains computation worksheets" that are provided within the SELF ASSESSMENT FORM. My question is very specific -- ( and would appreciate a YES / NO answer). IS IT CORRECT TO PUT THE AMOUNT OF CGT (capital gains tax) taken off by Indian Tax Authorities in this field "Tax adjustment to 2022-23 capital gains" -- YES or NO ? If NO, in which other field should I put the "Amount of India CGT taken off".

Hi,

No.  If you’ve filled in the ‘Capital gains summary’ pages (SA108) and you’ve paid foreign tax on those gains, and you want to claim 
Foreign Tax Credit Relief for the foreign tax, fill in box 33 and boxes 37 to 40 (page F6) of SA106. Do not include these amounts in box 2 on page F 1.

Foreign (2023)

Thank you.

Thanks for the response. But Sorry, I am and always do an ONLINE TAX RETURN every year. I understand your response that SA106 and SA108 are needed for PHYSICAL RETURNS. That part is clear. BUT, for an ONLINE TAX RETURN, I have already gone to "3-Tailor your return" and to "4-Fill in your return" and ENTERED the capital gains using the "Capital gains computation worksheets" that are provided within the ONLINE ASSESSMENT FORM. IS IT CORRECT TO PUT THE AMOUNT OF CGT (capital gains tax) taken off by Indian Tax Authorities in this field "Tax adjustment to 2022-23 capital gains" -- YES or NO ? IT SEEMS TO WORK... I did put the INDIA CGT in that field ( as a negative figure) and I do notice in the final calculations, that the adjustment is happening. Thank you once again.

Hi taps1234 ag,
If you were completing a paper tax return, you would declare the foreign Capital Gains and tax paid on SA106.
As you are completing the online tax return, please select tailor your return and tick yes to the box "If you received any foreign income, do you need to complete the foreign section?" 
If you want to claim a foreign tax credit, select ' YES' to "Do you wish to claim Foreign Tax Credit Relief on Capital Gains".
Thank you. 

Hi,

The answer is no. In the capital gains section, you show the disposal value and the costs.  

The the gain and Indian tax taken off, is shown on SA106 (foreign), so that you can claim Foreign Tax Credit Relief.

Thank you.