A 'liferent' (interest in possession) trust receives significant income UK dividends the tax on which is satisfied by 10% tax credit at source. Of the foreign dividends some are received gross and some after 25% withholding tax. HMRC's Trusts Settlements and Estates Manual (at TSEM3655) states that trustees can claim tax credit relief on behalf of a beneficiary based on the beneficiary's marginal rate.
As the trust income is so high the beneficiary is into higher rate tax. Consequently as an individual he is liable at 32.5% on the trust dividend income shown on the R185 which suggests to me that the full 25% foreign tax deduction is relievable. However the new style R185 states that the figure to include in box 7c is the lower of foreign tax actually withheld and the amount of tax to which the trust was liable...
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