In SA106 form, box 2 Foreign Tax Credit Relief, there is a note saying that if the tax payer is calculating the tax bill, the tax payer should use Helpsheet 263 to work out the amount.
1. If I leave this box blank, does it mean that I have not selected to claim the foreign tax credit relief?
2. Will HMRC calculate the foreign tax credit relief for the tax payer if the tax payer leave it blank for box 2?
3. If the tax payer want to calculate the FTCR, what number should be filled in this box 2?
Given the following information:
a. the tax payer doesn't have any employment income/other income in the UK, but the tax payer has got two sources of foreign income, one is interest/savings income and the other is dividend income.
b. The foreign interest is GBP23,000, foreing dividends is GBP26,000 (gross before deduction of foreign tax paid)
c. Foreign tax paid for interest is GBP250 and foregin tax paid for dividend is GBP3,500.
d. Foreign tax allowed under DTA is GBP2,300 (10% on interest) and GBP3,900 (15% on dividends)
e. The UK tax liability on interest is GBP886 = (23000-12570-5000-1000) x 0.2.
f. The UK tax liability on dividends is GBP2,100 = (26000-2000) x 8.75%.
Please kindly advise which amounts FTCR should be filled in box 2?
i. GBP250 + GBP3,500=GBP3,750 or
ii. GBP2300 + 3900 = GBP6200 or
What is the final UK tax liability? Will it be zero as the tax liability (GBP2,986) can be fully offset by the foreign tax credit relief GBP3,750.