Taxation (International and Other Provisions) Act 2010 section 9

Rule 1: the unilateral entitlement to credit for non-UK tax

Section 9 establishes the basic right to claim credit relief against UK tax for foreign taxes paid, even where there is no double taxation agreement in place with the relevant territory.

• Credit is available for foreign tax paid on income or gains arising in an overseas territory, provided that tax corresponds to a UK tax such as income tax, corporation tax, or capital gains tax.
• The foreign tax need not be a national-level tax — it qualifies even if levied by a province, state, or local authority such as a municipality.
• Earnings from personal or professional services performed in the territory are treated as income arising there, ensuring they qualify for credit relief.
• Special rules apply for the Isle of Man and Channel Islands, and the credit is subject to further conditions set out in sections 11 and 12.