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09 February 2016
Can state taxes deducted from US interest that is taxable in the UK be recovered?
My client is a US citizen who has lived in the UK for 18 years. Because of a change in circumstances he now receives interest from the US from which state taxes are deducted and we note that these are shown on his US tax return. The total interest will be about £120 000.
The client has minimal UK income sources but all will be disclosed in the UK tax return. Under the US/UK double taxation agreement we believe the UK has primary taxing rights. We have two questions as follows.
- Can the various US state taxes deducted at source on interest be reclaimed from the US?
- If so what are the time limits in the US and how does our client make the relevant claim?
Readers’ comments are appreciated.
Query 18 724– Della Ware.
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