ITA 2007 s.811

ITA 2007 s.811

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Come across something on a file I had never seen before (hardly a novel concept!) and after looking into it I can see what has happened but with a tiny tweak it seems easy to improve the client's situation.  But I suspect I'm missing something...

In a nutshell, client was NR NOR ND.  Taxed on UK income except for interest and dividends, which per ITA 2007 s.811 appear to be excluded from the calc.  Then the tax at source is put in as a tax charge.  After reading s.811 this seems correct, but to my eye by receiving the interest net the client has upped their liability, as as I understand it the tax in this situation is capped at the tax on the non-excluded income plus tax at source on the excluded income.  So by receiving the interest gross they would reduce their tax bill by the tax at source!

Seems simple, which makes me suspect I've missed something... :)

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