Sanity check

Sanity check

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An IIP receives (say) £9000 gross foreign dividends from which (say) £500 foreign tax has been deducted all of which qualifies for DTR.  The dividends qualify for a 10% UK tax credit

So, sanity check No 1:  In addition to ticking the far right column in page TF1 to state that it qualifies for DTR, I then also have to manually duplicate this in box 4.9 (on page TF3) to get the DTR?  Our software does not populate 4.9 from the ticks in page TF1, hence I thought it best to check.  I can't see any other way to get the DTR into the tax calculation working sheet, on which box T7.4 (page 12) seems to expect to pick it up from box 4.9.

Sanity check No 2:  In preparing the R185 for the beneficiary, I enter £9000 gross foreign dividends (not the grossed up £10K)), together with £500 foreign tax, but the 10% imputed UK tax credit does not hit the R185 at all.  Instead treat it as qualifying for UK tax credit in the beneficiary's tax return and it will then be grossed back up to £10K again (+10% tax credit) in the beneficiary's tax return.

Sorry, all a bit basic, but I don't trust myself on this.  Every so often an R185 hits my desk prepared by someone else for a trust that we do not deal with, which shows foreign dividends and an amount of UK tax that happens to be exactly 10% of the gross income on the R185, and I feel that these have probably been incorrectly prepared.

With kind regards

Clint Westwood

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