http://www.legislation.gov.uk/ukpga/2010/8/section/18Taxation (International and Other Provisions) Act 2010An Act to restate, with minor changes, certain enactments relating to tax; to make provision for purposes connected with the restatement of enactments by other tax law rewrite Acts; and for connected purposes.texttext/xmlenStatute Law Database2026-04-17Expert Participation2025-03-20 Part 2Double taxation reliefCHAPTER 2Double taxation relief by way of credit<Emphasis>Effect to be given to credit for foreign tax allowed against <Acronym Expansion="United Kingdom">UK</Acronym> tax</Emphasis>Entitlement to credit for foreign tax reduces UK tax by amount of the credit181Subsection (2) applies if—aunder double taxation arrangements, orbunder unilateral relief arrangements for a territory outside the United Kingdom,credit is to be allowed against any income tax, corporation tax or capital gains tax chargeable in respect of any income or chargeable gain.2The amount of those taxes chargeable in respect of the income or gain is to be reduced by the amount of the credit.3In subsection (1) “credit”—ain relation to double taxation arrangements, means credit for tax payable under the law of the territory in relation to which the arrangements are made, andbin relation to unilateral relief arrangements for a territory outside the United Kingdom, means credit for tax payable under the law of that territory,but see sections 12(3) and 63(5) (dividends: certain tax payable otherwise than under the law of a territory treated as payable under that law).3AReferences in subsection (3) to tax payable under the law of a territory outside the United Kingdom do not include tax paid by a company in relation to which an election under section 18A of CTA 2009 (exemption for profits or losses of overseas permanent establishments) has effect in respect of a relevant profits amount or relevant losses amount within the meaning of that section.4Subsection (2) applies subject to—athe following provisions of this Chapter,bsection 106 (Chapter 1 and this Chapter operate for capital gains tax purposes separately from their operation for the purposes of other United Kingdom taxes), andcChapter 2 of Part 18 of ICTA (double taxation relief: pooling of foreign dividends paid before 1 July 2009).5Credit is allowed under subsection (2) against any tax only if, under the arrangements concerned, credit is allowable against that tax.6Credit against income tax is given effect at Step 6 of the calculation in section 23 of ITA 2007.Pt. 2 modified by 1988 c. 1, Sch. 19ABA paras. 26-28 (as inserted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 8 para. 34(3) (with Sch. 9 paras. 1-9, 22))Pt. 2 applied by 2010 c. 4, s. 269DL(6) (as inserted (with effect in accordance with Sch. 3 Pt. 3 of the amending Act) by Finance (No. 2) Act 2015 (c. 33), Sch. 3 para. 1)S. 18(3A) inserted (19.7.2011) by Finance Act 2011 (c. 11), Sch. 13 paras. 26, 31