INTM167270 - UK residents with foreign income or gains: corporation tax: Loan relationships: relief for foreign tax: identification of UK tax: Example 3
The loan relationship profit equals the amount of the credits relating to interest which has suffered foreign tax:
The figures are as in example 1 (see INTM167250) except that debits total 拢1,400 so the taxable profit is 拢500.
For the purpose of allowing credit relief in respect of the foreign interest of 拢500 the computation is restated to show UK tax chargeable on the credits of 拢500 + 拢600 + 拢800 and to show separately debits of 拢1,400 which are then treated as available to be set against profits of any description for that accounting period under TIOPA10/S52. Taking account of other profits for the accounting period the result would be as follows
| - | Trade | Loan Relationship | - | Property Income | Foreign dividend | Total |
|---|---|---|---|---|---|---|
| Profits | 2,000 | 500 | - | 500 | 1,000 | 4,000 |
| Restated as | Trade | Loan Relationship (i) | Other Loan Relationship | Property Income | Foreign dividend | Total |
| Profits | 2,000 | 500 | 1,400 | 500 | 1,000 | 5,400 |
| less Loan relationship debits (ii) | - | - | (1,400) | - | - | (1,400) |
| - | 2,000 | 500 | - | 500 | 1,000 | 4,000 |
Notes:
i) see note (i) to example 1.
ii) see note (ii) to example 1.