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FINANCE ACT 2005 RESTRICTED DOUBLE-TAXATION RELIEF
- UK Finance Act 2005 introduced two changes which restricted the credit the UK Revenue will permit for foreign tax paid on foreign income. These are: double-taxation relief for trade receipts; and anti-avoidance and double-taxation relief. The first of them is designed to clarify the amount of double taxation relief that is to be given when foreign tax is paid on income that is a trade receipt for UK tax purposes. As the aim of double tax relief is to prevent the imposition of UK taxes resulting in double taxation of the same income, the credit given for the foreign tax paid should not exceed the amount of UK tax due in respect of the income that gave rise to the foreign tax payment. The legislation sets out expenses to be taken into account and expenses to be excluded.
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ANTI-AVOIDANCE AND DOUBLE-TAXATION RELIEF:
- The second one change to the existing system which has been introduced by the Revenue through the Financial Act 2005 was aimed "to provide a generic response to counter highly contrived schemes or arrangements that give rise to excessive, double taxation relief claims". The provisions apply where a taxpayer claims relief for foreign tax where there is an arrangement the main purpose, or one of the main purposes, of which is tax avoidance and where the arrangement falls within at least one of five prescribed circumstances. The expenses to be taken into account are those incurred directly in earning an item of income, where expenses relate partly to the income and partly to other matters they are to be allocated on a just and reasonable basis.
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DID YOU KNOW YOU CAN SET-UP YOUR COMPANY ONLINE
Looking for information & guidance regarding how to start your own business in the United Kingdom, how to get your company up and running, how to select the best business form, how to register a company and small business start-up advice? Are you looking to set-up a small business in England, Scotland or Ireland? Do you want to register your business in London, Liverpool, Edinburgh, Belfast or Dublin? Have an idea for a business and want to start now? Why should you bother with registering your business company? Coddan specialising in incorporation of Private Companies Companies Limited by Guarantee, Charities, Public Companies, Partnerships (England, Wales, Scotland and Ireland incl. Republic of Ireland) formations.
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