Income and gains may be taxable in more than one country. The UK has three ways of ensuring that the individual does not bear a double burden:

1. 1)

   treaty tax relief may reduce or eliminate the double tax

2. 2)

   if there is no treaty, the individual can claim ‘unilateral’ relief by deducting the foreign tax from their UK tax

3. 3)

   the individual can also deduct the foreign tax as an expense from their income (known as relief by deduction), although this is generally less efficient

This guidance note looks at these three options in turn, and then considers how the reliefs should be used efficiently for income tax and capital gains tax and how they should be reported for self assessment. It does not cover remittance basis users. For this, see Simon’s Taxes E4.1323.

HMRC guidance on a country by country basis is given in DT2140PP.