RPSM13101550 - Technical Pages: International: Double taxation agreement relief: Claims procedure: Tax returns SA100 and SA101

Claims procedure: Tax returns SA100 and SA101

In order for a UK member of an overseas pension scheme to receive double taxation agreement relief on contributions that they make in a tax year they must make a claim for the relief in a Tax Return.

Ordinarily, individuals claiming tax relief under a double taxation agreement (DTA) on contributions that they have made to an overseas pension scheme should enter the amount of contributions eligible for relief at box 14.4 on the SA100 Tax Return. This is the case even if the individual is a “tax equalised” employee within the Modified PAYE arrangement (see RPSM13101590), or if their PAYE coding has been adjusted in response to an in-year claim so as to provide relief on a provisional basis (see RPSM13101580).

Employees should, where possible, enter at box 1.26A on the SA101 Employment Pages of the Tax Return the amount of any contributions made by their employer to an overseas pension scheme in respect of them on which they are exempt from income tax under a DTA. Providing a contributions figure may not be straightforward and the SA101 Notes for 2006/07 “that:

• if your scheme gives you a statement of such employer contributions paid over the calendar year (or a different year) ending within the 2006/07 tax year you can enter that figure.
• if your scheme provides defined benefits and gives you a statement of the increase in value of your rights for a year ending during the 2006/07 tax year, you should enter instead that figure minus any contributions you made to the scheme in the same year.  (A scheme providing defined benefits is typically one in which the level of benefits is calculated by reference to your final salary and length of service with your employer.)
• if your scheme provides defined benefits and does not give you such a statement you need not make an entry.”

As explained in Help Sheets IR211 and IR212, individuals claiming tax relief under a DTA in relation to personal and/or their employer’s contributions should specify at box 1.40 on the SA101 Employment Pages of the Tax Return the DTA and article under which they are claiming relief. They should also confirm:

• that their scheme has been accepted by Pension Schemes Services as corresponding to a UK pension scheme, or
• in the case of a claim made under the UK/USA DTA, their US scheme is of a type specified in the Exchange of Notes of 24 July 2001 as being a pension scheme under Article 3.1(o) of the UK/USA DTA, or
• in the case of a claim made under the UK/Ireland agreement, their scheme is tax- approved, or registered for tax approval, in Ireland.

However, if the individual has made an in-year claim they can provide at box 1.40 a reference to the letter of claim instead. This can be done even if the in-year claim has not been processed before the end of the tax year.

Where an individual’s claim relates solely to tax relief for pension contributions against employment income there is no need to make an entry on the IR302 or the IR304.