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Where Taxpayers and Advisers Meet

Withholding Tax - Unilateral Relief

GL
Posts:123
Joined:Wed Aug 06, 2008 3:52 pm
Withholding Tax - Unilateral Relief

Postby GL » Thu Oct 07, 2010 12:16 pm

A UK company has:

- trading losses b/fwd
- Trading profits in the year
- Has suffered withholding tax in the year (Hong Kong - No double tax treaty)

I am correct in that the company's PCTCT will be reduced to £nil by use of the trade losses b/fwd and that the only way that it can get any form of relief against the withholding tax will be to net it off against the income as I don't believe that the tax paid can be offset against the future periods...?

simplytax
Posts:86
Joined:Wed Aug 06, 2008 3:34 pm

Re: Withholding Tax - Unilateral Relief

Postby simplytax » Thu Oct 07, 2010 2:23 pm

If the trading losses b/f exceed the trading profits of the year then the WHT will require to be claimed as an expense ( s35 TIOPA 2010 ) thereby increasing the trading loss to carry forward.

If you were to disclaim say capital allowances or other reliefs in the current year and this resulted in an overall profit for the year after losses b/f then you could consider if any double tax credit relief is available that may give a better position. If credit relief restricted then can only c/f unused foreign tax if the overseas activity meets the definition of a permanent establishment in s1141 CTA 2010.

GL
Posts:123
Joined:Wed Aug 06, 2008 3:52 pm

Re: Withholding Tax - Unilateral Relief

Postby GL » Thu Oct 07, 2010 3:44 pm

Thanks very much for the response.

Alas no real CA's of note to claim.

I suppose expensed relief is better than no relief!

zenith
Posts:7
Joined:Fri Sep 03, 2010 1:18 pm

Re: Withholding Tax - Unilateral Relief

Postby zenith » Thu Oct 07, 2010 4:25 pm

There was a UK-Hong Kong DTA signed June 2010.


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