Offset foreign tax against UK liability

[James C]

Hello,

Quick question. Can an individual (UK res and dom) offset income tax paid in Libia against their UK liability, as there seems to be no UK/Libia tax treaty. They work for a Libian oil company on an oil-rig in the med.

Many thanks

[King_Maker]

IIRC,I would normally expect Unilateral Relief (section 790 ICTA 1988) to apply in these circumstances.

[James C]

Thank you for this - I will look it up. What do you mean by IIRC (sorry if this is a daft question)

[maths]

I agree with King-Maker.

However, for any Libyan "income" tax to be offset against any UK income tax on the same income it is important that the Libyan "income" tax is computed according to similar principles to UK income tax.

If the Libyan tax is for example simply some arbitrary amount/lump sum then problems of offsetting credit can arise.

You will also, of course, need to keep proof of payment in Libya.

HMRC also produce a list of foreign taxes eligible for credit.

[King_Maker]

IIRC = If I Recall Correctly.

I was just theorising, as I have no experience of Libyan tax.

[James C]

Many thanks all