INTM602500 - Transfer of assets abroad: Other general provisions: Applicable tax rates for the income charge

One other way by which the legislation seeks to ensure that income charged to tax under the income charge is not subject to a double charge to tax is by affording relief where the income arising to the person abroad has borne income tax by deduction or otherwise (ITA07/S745).

The legislation provides that where any income has borne income tax at

• the basic rate,
• the savings rate, or
• the dividend ordinary rate

that amount of tax is not charged again when charging the income under the income charge. In effect, a tax credit is available if the income which has been taxed is defined within its specific charging legislation as ‘income for all the purposes of the Taxes Acts’.

Under the transfer of assets legislation, the dividend income of a person abroad, taxable on the individual under the income charge, is treated as if it were actually received by the individual and is therefore charged at the dividend rate.