A single, UK resident individual born 01/01/1940 has just two income sources in 2005-06: A pension of £10K and overseas dividends of £10K (gross) from which foreign tax has been deducted at source at 15%, ie £1.5K in accordance with treaty.
Without the overseas income his liability would be £389.40, ie: Pension income £10K less PA £7090, bal £2910 of which £2090 @ 10% and £820 @ 22%.
With the dividend income his PA is abated to £6840 giving rise to a liability on the pension of £444.40, ie: Pension income £10K less PA £6840, bal £3160 of which £2090 @ 10% and £1070 @ 22%.
Can the tax liability on the pension be reduced back to £389.40 by way of DTR as the foreign tax deducted on the divi exceeds the liability on the divi by more than £55?
Clint Westwood
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I think you know which one...
and it isn't fair
do check if client makes any gift aid donations - even things like National Trust subs etc