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Where Taxpayers and Advisers Meet

Foreign Tax Credit Relief with 2 properties and loss overall

JPUK
Posts:1
Joined:Sat May 27, 2017 10:17 pm
Foreign Tax Credit Relief with 2 properties and loss overall

Postby JPUK » Sat May 27, 2017 10:20 pm

I rent out two foreign properties. One is in Canada and I made a profit and paid Canadian tax. On the other in Europe, I made a greater loss so combining the two, I have made a loss overall. Does this mean that I cannot claim FTCR as the HMRC software seems to lump them together so I am not paying any income tax on the Canadian property income, or can they somehow be considered separately?

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: Foreign Tax Credit Relief with 2 properties and loss overall

Postby bd6759 » Sun May 28, 2017 10:17 am

If you are not paying tax on the foreign income, you don't need FTCR. What difference would it make if you were liable to tax but reduced it to nil with FTCR?

maths
Posts:8507
Joined:Wed Aug 06, 2008 3:25 pm

Re: Foreign Tax Credit Relief with 2 properties and loss overall

Postby maths » Sun May 28, 2017 5:05 pm

For UK tax purposes the renting out of your two overseas properties constitutes a single "overseas property" business.

As a consequence, income and expenses area aggregated to produce a single profit/loss. If a loss, then the foreign tax credit is simply lost.


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