Taxation (International and Other Provisions) Act 2010 section 41

Amount of limit

Section 41 sets an overall cap on the total foreign tax credit that can be claimed against a person's combined income tax and capital gains tax liability for a tax year.

• The total foreign tax credit is the sum of all credits allowed against income tax and capital gains tax under all double taxation agreements and unilateral relief arrangements.
• This total credit cannot exceed the person's combined income tax and capital gains tax for the year, minus any amount treated as deducted from gift aid donations.
• When calculating the income tax and capital gains tax figures for the cap, no reduction is made for any foreign tax credit — you use the pre-credit tax liabilities.
• This overall cap applies on top of the separate per-source and per-arrangement credit limits that apply under other provisions.