Taxation (International and Other Provisions) Act 2010 section 139

Capital gains tax credit for special withholding tax

Section 139 provides a capital gains tax credit for individuals who have had special withholding tax deducted from the proceeds of a disposal of assets, where those proceeds include savings income.

• Where a UK-resident individual disposes of assets and the disposal proceeds include savings income on which special withholding tax has been levied, they may claim a capital gains tax credit.
• The credit takes the form of a deemed payment of capital gains tax for the tax year in question, treated as paid on 31 January following that tax year for the purposes of repayment supplement calculations.
• The amount of the deemed tax credit is calculated in accordance with section 140 of the same Act.
• When determining whether the individual would be chargeable to capital gains tax on the disposal, any allowable loss deductions and the annual exempt amount are ignored.