These instructions apply to taxed overseas income received by a
discretionary or accumulation trust. The trustees can claim double
taxation relief in respect of overseas tax that qualifies for
relief. The trustee’s marginal rate is the rate applicable to
trusts, or where it applies, the dividend trust rate. INTM367780+
onwards has instructions about calculating relief.
A paying agent may have allowed provisional tax credit
relief on overseas income. The computation of double taxation
relief must reflect this.
Tax pool
The ICTA88/S687 tax pool must contain only UK tax paid or
suffered by deduction. It must not include UK tax covered by credit
for overseas tax.
ICTA88/S687 (3)(a) effectively withdraws the double taxation
relief when the trustees make a discretionary payment to a
beneficiary.
