The short version: Foreign Tax Credit Relief stops you paying tax twice on the same income. If you’ve already paid tax in another country on money that’s also taxable in the UK, you can usually claim relief so you’re not doubled up.
Who can claim it?
Mainly UK tax residents who earn money abroad and have already paid foreign tax on it. If you’re non resident but have brought foreign income into the UK, you might be able to claim too.
How does it work?
The relief reduces your UK tax bill by the amount of foreign tax you’ve paid, up to the UK tax due on that income. So if you paid more tax abroad than you’d owe here, you won’t get all of it back. But you won’t pay twice on the same earnings.
How do you claim?
Through your Self Assessment tax return. There’s a section for foreign income where you declare what you earned, what tax you paid overseas, and claim the relief.
What if there’s a double taxation agreement?
The UK has agreements with many countries that set out which country gets to tax what. These agreements make claiming relief more straightforward and can sometimes mean you’re only taxed in one country to begin with.
Earning abroad and not sure how to handle the tax? Get in touch and we’ll make sure you’re not paying more than you need to.
