TRUSTS AND ESTATES OF DECEASED PERSONS FOREIGN TAX CREDIT

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TRUSTS AND ESTATES OF DECEASED PERSONS FOREIGN TAX CREDIT Powered By Docstoc
					                                                                                                                  For the year ended 5 April 2010

                                                                                                                             Helpsheet 390
                                                                                                              For the Trust and Estate Foreign Pages


TRUSTS AND ESTATES OF DECEASED PERSONS: FOREIGN TAX CREDIT RELIEF FOR CAPITAL GAINS

To calculate the Trust or Estate's tax, use this helpsheet to                      Method
work out the foreign tax credit relief available against
                                                                                      Step 1    Make sure that you have completed Pages TC1 to TC4
Capital Gains.
                                                                                                of the Trust and Estate Capital Gains Pages.
Under the terms of a Double Taxation Agreement, or unilaterally,
                                                                                      Step 2    Complete Page TF3 of the Trust and Estate Foreign
relief by way of credit for foreign tax paid ('tax credit relief') is
                                                                                                Pages to show the amount of each gain in respect of
available against UK Capital Gains Tax chargeable on the
                                                                                                which you are claiming foreign tax credit relief; the
same gains.
                                                                                                period over which the UK chargeable gain accrued;
Alternatively, the foreign tax may be deducted in calculating the                               the amount of the gain under the foreign country's
gain or loss on a particular disposal (see page TCN13 of the Notes                              tax rules; the period over which the foreign gain
to the Trust and Estate Capital Gains Pages). However, this will only                           accrued and the amount of the foreign tax paid.
usually be to your advantage where no UK tax is chargeable on a
                                                                                      Step 3    Calculate separately the UK Capital Gains Tax
disposal, for example, when a loss results in there being no UK tax
                                                                                                chargeable in respect of each gain on which you have
against which the foreign tax can be set off.
                                                                                                paid foreign tax and for which you are claiming credit.
This helpsheet will enable you to work out the amount of foreign                                Use the Working Sheet on page 3 of this helpsheet to
tax credit relief you can claim. You will also need to obtain and                               help you to do this.
complete the Trust and Estate Foreign Pages. Ask the
                                                                                      Step 4    Compare the UK Capital Gains Tax chargeable on each
SA Orderline for a copy if you do not already have these.
                                                                                                gain with the amount of foreign tax eligible for credit.
General principles                                                                              The relief you can claim is the lower of the two
•	 The amount of credit for foreign tax is not to exceed the lower                              amounts. Copy the total relief due to box 4.10 of
   of the foreign tax charged on the gain and the UK tax on the                                 the Trust and Estate Foreign Pages and box T6.22
   doubly taxed part of the gain.                                                               on page TTCG10 of the Trust and Estate Tax
                                                                                                Calculation Guide.
•	 If the foreign tax paid exceeds the UK tax on the gain, the
   excess can neither be deducted from the amount of the gain
   chargeable to Capital Gains Tax nor can it be repaid.

•	 The amount of credit must be calculated separately for each
   gain. An excess of foreign tax over the UK tax on a particular
   gain cannot be credited against tax on any other gain.




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                                                                                                                            Helpsheet 390
                                                                                                             For the Trust and Estate Foreign Pages

C O M P L E T I N G T H E F O R E I G N TA X C R E D I T R E L I E F W O R K I N G S H E E T F O R C A P I TA L G A I N S


Column A (lines 1-13)                                                            Column C (line 15)
You should enter in rows 1-10 of column A details of your                        For each separate column, enter the lower of the figures at
chargeable gains minus any gains that are taxable on any settlor or              lines 13 and 14.
beneficiary of the settlement. Your gains are those after all                    Column A (line 15)
allowable losses have been set off.                                              Add up all the figures in column C, line 15, and enter the total in
Enter in rows 11 and 12 the figures as indicated from the                        column A. This is the total foreign tax credit relief allowable for
appropriate boxes of the Trust and Estate Tax Return.                            the year. Copy this figure to box 4.10 in your Trust and Estate
Columns B and C (lines 1-13)                                                     Foreign Pages and box T6.22 on page TTCG10 of the Trusts and
Use these columns to analyse the overall figures shown in column A.              Estates Tax Calculation Guide.

Enter in column B the amounts corresponding to gains chargeable
to UK Capital Gains Tax in respect of which you are not claiming
foreign tax credit relief, that is, any UK gains and any foreign gains
that have either not been subject to any foreign tax or where the
foreign tax paid has been deducted in computing the amount of
the gain that is chargeable to UK tax - see page 1 of the helpsheet.
Enter in column C (i) to (viii) individual gains that have been
subject to foreign tax for which you are claiming foreign tax credit
relief. If you have more than eight such gains, photocopy page 4
before making any entries.
When entering details of the annual exempt amount (line 11) you
should use it first against any gains in column B and then against
gains in column C, beginning with the item that has been
subjected to the lowest effective rate of foreign tax.
Column C (line 14)
Enter the respective amounts of foreign tax eligible for foreign tax
credit relief.




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                                                                                                                      Helpsheet 390
                                                                                                        For the Trust and Estate Foreign Pages



Trusts and Estates: foreign tax credit relief Working Sheet for Capital Gains Tax

          Enter in rows 1 to 10 below details of                        Total gains           Items of gains in respect of which relief is
          gains from column H on Page TC1                                in respect               claimed by way of foreign credit
     of the Trust and Estate Capital Gains Pages                        of which no
                                                                      FTCR is claimed

                                                                                          Foreign gain 1      Foreign gain 2    Foreign gain 3
                                                        A                     B                 C (i)             C (ii)             C (iii)


                                                 1. £


                                                 2. £


                                                 3. £


                                                 4. £


                                                 5. £


                                                 6. £


                                                 7. £


                                                 8. £


                                                 9. £


                                                10. £


 11. Minus annual exempt amount (from box 5.10) £10,100               £                   £                  £                 £


 12. Equals net taxable gains (from box 5.11)      £                  £                   £                  £                 £



 13. Capital Gains Tax chargeable
     (row 12 above x 18%)                          £                  £                   £                  £                 £



 14. Foreign tax eligible for credit relief                                               £                  £                 £

                                                   Copy to box 4.10
                                                   and box T6.22*
 15. Foreign tax credit relief allowable           £                                      £                  £                 £


* box 4.10 on the Trust and Estate Foreign Pages and box T6.22 on page TTCG10 of the Trust and Estate Tax Calculation Guide.




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                                                                                                                     Helpsheet 390
                                                                                                     For the Trust and Estate Foreign Pages



Trusts and Estates: Foreign Tax Credit Relief Working Sheet for Capital Gains Tax, continued


    Totals                    Items of gains in respect of which relief is claimed by way of foreign credit

                              Foreign gain 4         Foreign gain 5            Foreign gain 6       Foreign gain 7        Foreign gain 8
       A                          C (iv)                 C (v)                     C (vi)               C (vii)                C (viii)


  1. £


  2. £


  3. £


  4. £


  5. £


  6. £


  7. £


  8. £


  9. £


 10. £


 11.   (from box 5.10)    £                      £                         £                    £                     £


 12.   (from box 5.11)    £                      £                         £                    £                     £



 13.   (row 12 above
       x 18%)             £                      £                         £                    £                     £




       £                  £                      £                         £                    £                     £


 15.   Copy to box 4.10
       and box T6.22*     £                      £                         £                    £                     £


* box 4.10 on the Trust and Estate Foreign Pages and box T6.22 on page TTCG10 of the Trust and Estate Tax Calculation Guide.




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