If you have income from a source in one country and are resident in another, you may be liable to pay tax in both countries under their tax laws. To avoid 'double taxation' in this situation, the UK has negotiated Double Taxation (DT) treaties with more than 100 other countries. Each treaty is called either a 'Double Taxation Agreement' or a 'Double Taxation Convention', depending on the wording of the treaty.
The DT Digest is available by following the link below, which summarises the main relieving provisions of the double taxation treaties HM Revenue & Customs (HMRC) deals with.
If you are a resident of a country with which the UK has a DT treaty, you may be able to claim exemption or partial relief from UK tax on certain types of income from UK sources. The precise conditions of exemption or relief can be found in the text of the relevant treaty.
Relief from UK tax provided in a DT treaty is not automatic. Treaty benefits must be the subject of an application to HMRC. Only the overseas person receiving the income can make a valid application.
Applications for relief at source and claims to repayment of UK income tax may be made by:
The types of income covered by the DT treaties fall into two main categories. The links below will give you more information on each category.
As a resident of a DT treaty country who receives any of the following income from UK sources:
you may be able to apply for relief from UK tax. Your application will be dealt with by HMRC Residency.
The relief available depends upon the terms of each DT treaty and HMRC decides whether an application is allowable. If it is, relief at source is normally allowed on future payments of the income. HMRC directs the payer to pay the income either:
Where tax has already been deducted from previous payments of the income, the repayment of UK tax is made by the UK HMRC.
Details of the application/claim forms you should use are listed below.
The UK has DT treaties with more than 100 countries. HMRC has a range of forms for residents of these countries to claim relief from UK income tax.
You can use the same form to:
HMRC is updating and improving its forms. The new versions are published on this website as soon as they are ready. Please check these pages regularly so that you get the latest version of the form for your country of residence.
You do not need to send tax vouchers with your completed claim form, but you should keep them safe in case they are needed later to support your claim. If you have any doubt about how you have completed the form you can send vouchers if you think it will help.
Downloadable forms are available for residents of all countries with which the UK has a comprehensive DT treaty. To get the form, please select the name of your country of residence.
If your country of residence is not shown, you can use form DT/Individual or DT/Company.
From 1 January 2007, Property Income Distributions are paid after deduction of basic rate income tax. You can find out about relief from UK tax on property income distributions and go to the forms available to claim relief
Or you can get the form you need from HMRC Residency.
To make sure that you get the correct claim form please:
After completion, the form needs to be certified by the taxation authorities of your country of residence to confirm that you are a resident of that country.
For companies in the EU that receive interest or royalties from 'associated companies' in the UK, you can find out about relief from UK income tax on cross-border interest or royalties and use form EU Interest & Royalties, follow the link below for more information.
Some of the UK's DT treaties provide for payment to a resident of the other country of part of the tax credit attached to UK dividends. But in practice, the amount that the UK retains under the DT treaty covers the whole of the tax credit. So if a shareholder made a DT treaty claim for payment of tax credit, there would be no balance of tax credit remaining for HMRC to pay.
Some of the UK's DT treaties provide for payment to a resident of the other country of part of the tax credit attached to UK dividends. But in practice, the amount that the UK retains under the DT treaty covers the whole of the tax credit. So if a company 'portfolio' shareholder made a DT treaty claim for payment of tax credit, there would be no balance of tax credit remaining for HMRC to pay.
The UK's DT Conventions with the following countries provide specific entitlements to direct investor companies. Please select the name of your country of residence for more information:
The UK's DT Conventions with Belgium, Italy, Luxembourg, Netherlands, Sweden, (and Switzerland for dividends paid before 6 April 2009) provide an entitlement to a tax credit to a direct investor company which controls 10 per cent or more of the voting power in the UK company paying the dividend. This is equal to half the tax credit to which a UK resident individual would be entitled and for payment of the excess of that half tax credit over their liability to UK tax. The UK tax liability is 5 per cent of the aggregate of the dividend and the half tax credit. Here is an example:
a) Amount of UK dividend paid to direct investor company £1,000,000.00
b) UK tax credit £111,111.11
c) One half of the tax credit £55,555.55
d) Aggregate amount of dividend plus the half tax credit £1,055,555.55
e) 5 per cent of the aggregate amount £52,777.77
Amount payable to the direct investor company (amount at (c) less amount at (e)) £2,777.78
Please select your country of residence from the list below. Some of the forms can be downloaded from this website.
There is no longer any need to send tax vouchers with the completed claim form, but you should keep them safe in case they are needed later to support the claim. HMRC will change the information about vouchers on the forms and notes as soon as they can.
For direct investor companies in Belgium, Italy, Luxembourg or Sweden the claim forms are available from HMRC's Large Business Service DT Treaty Team Helpline on Tel + 44 115 974 0897 (if calling from outside the UK) or Tel 0115 974 0897 (if calling from the UK).To make sure that you get the correct claim form please: