FROM: LOCATION: EXTENSION: DATE: REFERENCE: SUBJECT:
Head of Taxation, Taxation Department TAX/86/441 6860 13 February 2001 TAX/MCM/ln/Y2483 DOUBLE TAXATION RELIEF FOR NON-RESIDENT MEMBERS Personal accountants and members who deal with their own tax affairs to claim relief accordingly. Effective immediately
The purpose of this bulletin is to advise members of two changes that took place in March 2000 to allow credit relief to be claimed by non-residents. The first is a result of new legislation in Schedule 30 Finance Act 2000. The second relates to claims that may now be made in respect of past years by members who are resident in another territory that is part of the European Economic Area (EEA).
All Lloyd’s profits are taxable in the United Kingdom, whatever the residence of the member. In taxing these profits, the UK gives relief for foreign taxes.
Up until March 2000, the Inland Revenue applied different rules to members who were resident in the UK and to members who were resident outside the UK. Where the member was resident in the UK, the Inland Revenue allowed relief to be claimed either as a credit against the UK tax that was payable (credit relief), or taken as a deduction against profits (deduction relief) if the taxpayer so chose. Credit relief is generally more valuable than deduction relief, although the balance of advantage in any year will depend on whether there is sufficient UK tax to claim credit against.
However, where the member was not UK resident for tax purposes, relief was only given as a deduction from Lloyd’s profits.