Foreign tax relief on Self assessment

Dear HMRC team, Thank you very much for your support. I am in the process of reporting the capital gains from my overseas properties on which we have already paid taxes in Japan. To finalize the report, I have two questions: #1: I've identified a section for foreign dividends where we can report the tax already withdrawn. However, I couldn't find a similar section for reporting capital gains, except for the cells designated as "Foreign tax paid: (optional)." It seems this may not create any tables for adjustment. Should I use this section as the only place to report the tax already paid? #2: During the calculation, there's a section prompting for any other tax relief to be claimed. If I enter the amount of tax paid to Japan here, it reflects as "Total tax repayable to you for 2021-22." However, I understand that the UK does not typically refund taxes paid to foreign countries. Could you advise on the correct amount to enter? As per Article 13 of the UK-Japan tax treaty, tax on residential property in Japan should be solely taxed there and not by the UK. Nevertheless, your guidance indicates that we still need to report it to HMRC. I would greatly appreciate specific advice on how to claim the tax paid under the tax treaty. Thank you for your assistance. Sincerely,

Hi Nico_Japan,
If you are completing a paper tax return, the capital gains is recorded on SA108 and where overseas tax was paid on the gain, SA106, which allows you to claim a foreign tax credit.  
If you are completing an online return, in the section "3 - tailor your return", you would choose 'yes' to the foreign income question and the capital gains section on page 1 of 3.  when you move to 4 - fill in your return, there will be a section for foreign and one for capital gains.
Thank you.


 

Dear Team Thank you very much for your reply. What makes me confused is not the section of "tailor of your return" but 6. View your calculation page where we see "Amount of capital gain for which Foreign Tax Credit Relief is claimed". The next page asks "Total foreign tax credit relief on gains:" which indicates zero whilst I entered the amount of Tax paid in Japan. The final tax will be different if I claim int the same page saying "No" to "Do you agree the amount of foreign tax credit relief shown above?" and re-entering the value in "Total foreign tax credit relief on gains: (optional)". My question is, therefore, whether I should agree or disagree here in the case of avoiding double taxation. Kind regards,

Hi ,
 

Please agree the figure of £0.00 and navigate to the actual calculation.  In the calculation, you will see how much capital gains tax is payable.  If this is more than the overseas capital gains tax paid, you should click on go back to the foreign tex credit box and enter the amount of overseas capital gains tax paid.  If the UK Capital gains figure in the calculation is lower than the foriegn capital gains tax paid, then you go back and put in a credit equal to the UK capital gains payable. Thank you .