Taxation (International and Other Provisions) Act 2010 section 113

Deduction from capital gain for foreign tax (instead of credit against UK tax)

Section 113 allows foreign tax paid on the disposal of an asset to be deducted from the capital gain, as an alternative to claiming a credit against UK tax.

• Where foreign tax is charged on the disposal of an asset and borne by the person making the disposal, that tax may be deducted in calculating the gain.
• This deduction applies for both capital gains tax and corporation tax on chargeable gains purposes.
• The deduction is subject to the double taxation relief rules in Chapters 1 and 2 of Part 2 of this Act, and to special withholding tax provisions in section 143.
• The terms "asset" and "disposal" carry the same meanings as in the Taxation of Chargeable Gains Act 1992.