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Posted Sun, 23 Jul 2023 14:33:57 GMT by winglam
Box 2 ForeIgn Tax Credit Relief, in the notes, it has stated that you are calculating your tax bill you may also want to calculate your Foreign Tax Credit Relief, what should I fill for this box? If the taxpayer has foreign interest GBP20,000 and paid foreign tax GBP2,000 (10%) on this foreign interet and have foreign dividends GBP40,000 and paid foreign tax GBP7,200 (18%), should I fill in GBP9,200 in box 2 if I want to claim foreign tax credit relief? On Page F2, Interest and other overseas savings, should I enter GBP20,000 in column Band column C is GBP2,000? On Page F2, Divdends from foreign companies, should I enter GBP40,000 in column B and column C GBP7,200? On Page F3, Interest from overseas savings, should I mark X in column E and enter GBP20,000 in column F? On Page F3. Dividends from foreign companies, should I mark X in column E and I should enter GBP40,000 in column F? HMRC will calculate the amount of foreign tax credit relief entitled by me according to the DTA, right? If that is the case, I don't need to fill in box 2, am I right? If I fill in box 2 as GBP9,200, what is the tax implication to me? If I leave it blank for box 2, will this affect my tax position? Will HMRC calculate the tax liability by using the calculation method which is most beneficial to the taxpayer? Or the taxpayer should do his own calculation to decide whether to claim the foreign tax credit relief or deduction relief? I have reviewed HS263 but I could not understand the calculation. In example 2, I don't understand why the foreign income is GBP48,000 but the tax liability is GBP7,560.
Posted Tue, 01 Aug 2023 12:54:58 GMT by HMRC Admin 32

You need to enter the gross amount of income you receive and the amount must be in sterling. If filing by paper, you can leave the entry at box 2 empty and HMRC will calculate the amount of foreign tax credit relief due to you. The amount of credit due is dependant on what the UK tax would be on the foreign income.

Thank you.

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