Claiming Foreign Tax Credit for Property Sale in France

Hi. I am trying to fill in my self assessment to report a second property sale in France last year. All calculations seem fine except that having added in the "Foreign" section the amount of chargeable gain (UK basis) and foreign tax paid, when I come to the calculations at the end the Foreign tax credit relief is calculated as 0. I expected it to pick up the foreign tax paid entered and use that. So I am then asked whether I agree and if I say no then I can enter the foreign tax paid again. Which frankly makes me nervous. I believe UK has a double taxation agreement with France so I expect I can offset the tax paid there. Is disagreeing with the calculation and overtyping the tax to be offset really the way it is supposed to work? Or am I missing something?

Hi,

In this situation, you will need to work out the amount of foreign credit you can claim. When asked "Do you agree the amount of foreign tax credit relief shown above?", select yes (for the time being) and save and continue. Move on to view and print your calculation. Have a look at the calculation, to obtain the amount of UK Capital Gains Tax payable. If the UK Capital Gains Tax is more than the Overseas Captial Gains Tax, then the foreign tax credit is 100% of the overseas tax paid.  

If the UK Capital Gains Tax is less than the overseas tax paid, then the foreign tax credit is the amount equal to the UK tax payable. Click on back to take you back to the "Capital gains - foreign tax credit relief and Special Withholding Tax". Change the radial button to 'No' and now enter the amount of tax credit you are entitled to claim. Click on save and continue to go back to your calculation, which should now show the credit.  

Thank you.

Does this mean that you reduce the cgt deducted in France to just your liability in order to arrive at zero .... my foreign tax is more than my uk liability would be, but can I leave hmrc to do calculation? I'm not even sure where on SA100/SA106 i should enter the information.... any advice please? Sale of eu holiday home where tax deducted abroad exceeds "capital gain minus annual allowance"

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