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How to calculate foreign tax paid on foreign self - employment income

Help please.

I'm preparing a self assessment tax return for a UK resident non-dom.  He arrived in the UK from the US about 2 years ago.  He had UK employment income and US self employment income.  For the US income I have profit and tax deducted for the calendar year to 31/12/11 (I was just going to apportion this for 9 months).  My question would then relate to the 3 months income to 31/3/12 where the US tax liability has not yet been calculated or paid? Would I be able to offset any US tax?

Or do I ask for the results of the period ending in the year to 5/4/12 and see what tax has been deducted from those?

Many thanks

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25th Jan 2013 17:08

Have you considered the treaty?

In particular Article 7.1?

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29th Mar 2014 08:10

Journal entries for Foreign tax credit and (later)Charity status

Hi, Can I check what I've done - 

Small company suffered tax withheld on income at 24.4% so could only claim the equivalent small company rate here in the UK. In the first year of accounts I said:

CR Fees income 

DR Debtors 

DR Foreign Tax Paid at Source (Asset on the balance sheet)

 

Then in the following year when tax had been assessed:

DR Tax expense

CR Foreign Tax paid at Source account

 

This still leaves an amount sitting on the balance sheet and there are two issues with it:

1. some of it can never be offset against CT liability in the UK because the original tax rate exceeded what would have been charged on the same income had it been earned here in the UK

2. And the rest of the amount won't be used because:

Now, part way through the (third) most recent accounting year, the company has been granted Charitable status so is a Ltd Company charity.

 

Can I have some feed back on what I've done so far and how to deal with the transition to Charity status.

 

Many thanks,

 

 

 

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