I do the UK tax return for an american person who has lived in UK for many years. Normally it is fairly straightforward as their total income and capital gains have been in the basic tax range in UK.
This year however they took a large distribution from their IRA in the US which takes them into UK higher rate taxes.
Among other things their December 2019 US tax return includes the IRA distribution of $65,000 and shows $19,500 federal tax was witheld (on 1042 - S). However when the US accountant finalised the US tax return it showed that a refund of just over $12,000 was due and was repaid.
When I finalise their UK tax return is it correct to deduct the net figure for foreign tax deducted of $7,500 ($19,500 less $12,000 repaid) (approx net UK figure £5,800) rather than the gross figure of $19,500?