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Posted Thu, 24 Oct 2024 10:14:26 GMT by Dragan
When I report a capital gain for a sale that occurred overseas, and in order to avoid double taxation want to claim in UK a relief for taxes paid overseas, should I look at the particular overseas item in isolation, or should I take in account other items from overseas tax return that are not reported/applicable directly on my UK tax return. For example, suppose I have a sale overseas that is reported on my tax returns both overseas and in UK. Suppose that overseas I should pay 10,000 for taxes on that sale. In that case I would ask for a relief of 10,000 on my UK tax return to avoid double taxation. Since I am a citizen of that country, their tax year has different dates from UK tax year, and I may use remittance basis in UK, some items that apply for my overseas tax return don't apply for my UK return. Suppose I have another sale that needs to be reported overseas, but is not reportable on my UK tax return. Suppose that with this additional sale my overseas payments would be 12,000. Also, suppose there is a relief that is applicable for my overseas tax return but is not applicable on my UK tax return. Suppose that with that relief my overseas payment is reduced to 8,000. There can be other items that either increase or decrease my actual payable overseas, but are not reportable on my UK tax return, and are not directly applicable to my UK tax return. When I want to report a relief for taxes paid overseas for a particular sale in order to avoid double taxation should I report an amount that would be payable if that sale is the only amount reported overseas? If I need to take in account items that affect my actual payable amount overseas but are not directly reportable/applicable in UK how should I account for them?
Posted Wed, 30 Oct 2024 18:33:18 GMT by HMRC Admin 20 Response
Hi,
Foreign tax credit relief is only applicable when UK tax is due on the same source of income -
Relief for foreign tax paid (Self Assessment helpsheet HS263)
Thank you.

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