PAYE81055 - PAYE operation: double taxation claims submitted by non resident individuals: income remitted to country of residence

Subjection to tax is a condition of relief which you may have to consider when dealing with double taxation claims. A subject to tax condition means that the claimant should be subject to tax in the country where they live on the income included on the claim form. The DT Digest (PDF 184KB) (HMRC website) (external users can find the guidance at http://www.hmrc.gov.uk/taxtreaties/dtdigest.pdf) provides further information in respect of specific agreements.

Subjection to tax in the other country may sometimes be dependent on whether the income has been remitted to the other country. Where there is a subject to tax condition you may also need to consider remittance. Remittance for the purpose of dealing with double taxation claims means ‘the amount of UK income sent to the overseas country of residence’.

Where income has been remitted to the overseas country of residence this will be stated on the double taxation claim, either in the certification box for the overseas tax authority to indicate how much income has been remitted or in Part B of the claim form.

Where only part of the income has been remitted you should allow relief from UK income tax only on the amount of income remitted to the country of residence. This is because we can only be certain that the amount remitted to the country of residence is subject to double taxation.