Foreign Tax Credit Relief

Hello, I received a Notice of Assessment from foreign tax office but the tax has not yet been paid. May I use the assessed tax amount to apply for foreign tax credit relief? Pls comment. Thanks.

Hi mkcchan,

Yes, you can claim a credit for the tax you have been charged in the overseas country, even if you have not yet paid it.

Thank you.

Dear HMRC Admin, Thanks for your reply. Which exchange rate should be used to convert the foreign tax into GBP? May I use the average exchange rate of the month (published by HMRC) that I got the notice of assessment? For example: If I got the notice of foreign tax assessment in August 2023, I use the average exchange rate in August 2023 to convert the foreign tax amount into GBP. Pls comment. Thanks again.

Hi,
 

You can use any of the rates in the tax year that the income was received see: Exchange rates from HMRC in CSV and XML format  . Thank you.

In 22/3 i sold a property in Spain at a profit of £19,983. I paid £4,541 to the Spanish authorities and have advised HMRC of this on my self assessment but have still been told I need to pay CGT on a profit of £7,683 i.e. the full profit less the annual allowance. The self assessment system will not allow for the fact that I have already paid tax in Spain

Hi,
Please refer to the UK-Spain Double Taxation Convention for guidance:
2014 UK-Spain Double Taxation Convention
Thank you

Not HMRC...you need to complete foreign pages for the gain and enter the foreign CGT paid on those pages

Is there an income limit on claiming foreign tax credit?

Hi,
You can see guidance here:
Tax on foreign income
Thank you.