Section 9: Rule 1: the unilateral entitlement to credit for non-UK tax
48.This section unilaterally gives DTR by way of credit (“credit relief”). It is based on sections 790(4), (5) and (12) and 793A(2) and (3) of ICTA and section 277(1) of TCGA.
49.As directed by section 277(1) of TCGA, subsection (2)(b) extends “income arising or any chargeable gain accruing” in section 790(4) of ICTA beyond income tax and corporation tax to capital gains tax. On a literal interpretation, section 790(4) would have to be read, in relation to capital gains tax, as referring to gains “arising”. But this terminology is not used in the enactments relating to capital gains tax. Subsection (2)(b) therefore refers to gains “accruing”, as this terminology is used both in section 790(4) of ICTA and in the enactments relating to capital gains tax.
50.Subsection (3) rewrites the words in brackets in section 790(4) of ICTA. Section 277(1) of TCGA has not been applied in subsection (3), as this would have produced a meaningless reference to capital gains.