Taxation (International and Other Provisions) Act 2010 section 73

Carry-forward and carry-back of unrelieved foreign tax

Section 73 explains how a company can use excess foreign tax that could not be fully credited in the current period, by carrying it forward to the next accounting period or back to earlier periods.

• Unrelieved foreign tax from a permanent establishment can be carried forward to the next accounting period, carried back to earlier periods, or split between both directions
• Carry-back is available for accounting periods that begin no more than 3 years before the period in which the excess arose
• If the company ceases to have the permanent establishment during the period, any excess not carried back is reduced to nil and cannot be carried forward
• Once an amount of excess foreign tax has been carried back and used, it cannot be treated as available again for any further carry-forward or carry-back