INTM168100 - Foreign tax paid on trade income: limitation on credit: 1998 legislation: First credit limit
For all foreign interest ICTA88/S798 provides that the amount of foreign tax which may be credited against a bank’s liability to Corporation Tax is not to exceed 15 per cent of the gross foreign interest established as in INTM168090. »Ê¹ÚÌåÓýapp limit of 15 per cent applies both to tax withheld and tax `sparedâ€�. For loans within the 1982 legislation (except in the case of a UK branch of a non-resident bank to which further restrictions (see INTM168310 - INTM168340) apply) this is the only rule which operates to limit the amount of the credit relief available for set-off against the bank’s liability to Corporation Tax in respect of its trading income. For interest within the 1987 and/or the 1998 legislation there is a second rule (see INTM168130) which may operate to limit the available relief further.