Taxation (International and Other Provisions) Act 2010 section 12

Rule 4: cases in which, and calculation of, credit allowed for tax on dividends

Section 12 sets out the conditions under which unilateral credit relief may be claimed for overseas tax on dividends paid by a company resident in an overseas territory, and how that credit is to be calculated.

• Credit for overseas tax on a dividend is only available if one of the specific dividend rules in sections 13 to 16 permits it — the general entitlement in section 9 does not apply on its own
• Where credit is available under sections 14, 15 or 16, any tax the paying company has paid in its territory on its own profits must be taken into account in determining how much credit is actually given
• Where credit arises under sections 15 or 16, additional taxes are brought into the calculation as if they were territory taxes, provided the dividend recipient controls (directly or indirectly) at least 10% of the voting power in the paying company, or is a subsidiary of a company that does
• For these purposes, a company is a subsidiary of another company if that other company controls, directly or indirectly, at least 50% of its voting power