I'm doing self-assessment via the HMRC web page and I'm not convinced it has got the FTCR calculation right because it computes FTCR as zero. Looking for advice.
I have a property which earns rent, and share dividends, and some savings interest, all earned in Australia. FTCR on all three is being calculated as zero.
I have income over £200k, and pay income tax at the 'additional rate' of 45% (in case that is relevant).
Rental property: The figures for the rental property are:
- Gross Income: £7196.00
- Expenses: £1704.00
- Net Income (Income-Expenses): £5492.00
- Tax paid in Australia: £2143.00
If I select 'N' to claim foreign tax credit relief the calculation comes up with a taxable amount of £3349.00 (instead of £5492.00), and this works out about £1000 quid better for me. It also seems too good to be true. (Is it legal to select 'N'? Do I really get to choose?)
Interest: This totals £858. Foreign tax of £81 has been paid already. If I claim FTCR at 10% it computes zero tax relief. (Why?)
Dividends: These total only £423. I think zero tax has been paid on these, so I guess they show compute zero FTCR because of that?
In summary the dividends probably make sense, but I don't get the other two. Questions in red. Any advice on offer would be appreciated, as I haven't been able to get through on the HMRC helpline yet.