What are the four conditions under section 142 of TIOPA 2010 that must be met before section 143 relief applies?

Section 142 requires four conditions: Condition A—the person is liable to income tax on savings income or has a chargeable gain including savings income; Condition B—special withholding tax was levied; Condition C—a formal claim for relief has been made; and Condition D—no foreign tax credit has already been allowed under Chapter 2 of Part 2.

Why does Condition D prevent duplication of relief under section 142 TIOPA 2010?

Condition D ensures a person has not already received foreign tax credit relief under the general double taxation rules in Chapter 2 of Part 2 for the same savings income or chargeable gain. This prevents a taxpayer from benefiting from both the general foreign tax credit provisions and the special withholding tax relief under Part 3 simultaneously.

How do Conditions A and B of section 142 work together in practice?

Condition A examines the UK tax position, requiring the person to be liable to income tax on a savings income payment or to have a chargeable gain from a disposal where proceeds include savings income. Condition B then examines the overseas position, requiring that special withholding tax was actually charged on that same savings income or disposal consideration.

Is a formal claim required to obtain relief for special withholding tax under TIOPA 2010 section 142?

Yes. Condition C explicitly requires that a formal claim for relief under Part 3 of the Taxation (International and Other Provisions) Act 2010 has been made in respect of the special withholding tax. Without submitting this claim, no relief is available regardless of whether the other three conditions are satisfied.

Taxation (International and Other Provisions) Act 2010 section 142

Conditions for purposes of section 143

Section 142 sets out four conditions that must all be met before special withholding tax can be taken into account when calculating a person's income or chargeable gains under section 143.

Condition A requires that the person is either liable to income tax on a payment of savings income, or has a chargeable gain arising from a disposal where the consideration includes savings income.
Condition B requires that special withholding tax has actually been levied on the savings income payment or on the disposal consideration (in whole or in part).
Condition C requires that a formal claim for relief under this Part of the Act has been made in respect of the special withholding tax.
Condition D requires that no foreign tax credit has been allowed for the savings income or chargeable gain under the general double taxation credit relief rules in Chapter 2 of Part 2, ensuring there is no duplication of relief.

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