New queries, issue 4319

Here or there

In 2008/09 my client (a higher rate taxpayer) became a director of an Irish company and was paid net of Irish PAYE tax of £13 500 shown on the 2008/09 return as double taxation relief (DTR) being rather less than 40% of the gross income.

When preparing the 2009/10 return (in July 2010) I realised that the Irish PAYE system had refunded £1 000 of this 2008/09 tax later in 2009 (they operate a calendar tax year and I had not picked this up when doing the previous year’s UK tax return). I amended the 2008/09 return and reduced the DTR by that amount.

HMRC sent an aspect enquiry letter questioning the 2008/09 DTR (they overlooked my amendment) and subsequently asked for confirmation that the DTR had been limited to the minimum foreign tax liability.

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