INTM161010 - UK residents with foreign income or gains: double taxation relief: General
When income arises in a foreign country to a UK resident and that income is taxable in that foreign country, the UK may give its resident relief for the foreign tax by crediting the foreign tax against the UK tax charged on that income.
Such relief is available either under the provisions of a double taxation agreement or unilaterally. Except where the claim is for relief in respect of tax spared (see INTM161270), the foreign tax must actually have been paid (although see INTM167170 for provisional relief for foreign tax when interest is relieved under the accruals basis).
The foreign tax must also be admissible for credit (see INTM161260 onwards) and the credit relief must not exceed the UK tax attributable to the income which is doubly taxed. Details of the basic rules of credit are given in INTM161100 onwards.
Credit is normally allowed as a deduction from the UK tax charged on the foreign income. For guidance on the general procedure for allowing relief, see INTM162510 onwards.