Taxation (International and Other Provisions) Act 2010 section 137

Income tax credit etc. for special withholding tax

Section 137 provides an income tax credit for UK resident individuals who have had special withholding tax deducted from their savings income, allowing the tax withheld to be treated as if income tax had already been paid.

• Where a UK resident person is liable to income tax (or would be but for an exemption or relief) on a payment of savings income, and special withholding tax has been levied on that payment, they may claim an income tax credit.
• On making a claim, income tax (referred to as "the deemed tax") is treated as having been both paid by or on behalf of the person for the relevant tax year and deducted at source for that year.
• The amount of the deemed tax credit is determined under section 138 of the same Act.
• The deemed tax is recognised for the purposes of key self-assessment and tax payment provisions, including personal and trustee returns, self-assessment calculations, payments on account, and repayment supplement rules.