 |
 |
|
|
This report is available whenever an amount has been entered in box 3 on page F1 (2007 : 6.9) (foreign tax credit relief claimed) on the tax return. The computation for foreign tax credit relief, also known as double taxation relief, is complex. This report does not show the full computation. The key figures are shown on the report to help explain the final total.
The report starts by printing the total income including all the foreign income.
It continues by progressively removing each item of foreign income from the tax computation.
Foreign income that have suffered the highest rate of foreign tax are taken out first.
This will reduce the UK tax due.
The difference between the tax due with the income included and excluded is the UK tax due on that item of foreign income.
The credit allowed is the lower of the UK tax due and the foreign tax paid.
As the foreign income is is removed from the total income, any top slicing relief (TSR) or personal age allowance (PA) may change as the total income falls. If this happens, the level of TSR or PA will be printed on the report.