Help needed on how to claim double tax relief..

Simran

I would be grateful if anyone is familiar with how to make a tax credit/relief claim in a self assessment tax return. The background is:

The individual is a US national who has been in the UK since late 2008. He came here for 2 years but his average days have gone well over 91 in the UK in 2009-10 so that makes him resident and ordinarily resident in the UK in 2009-10.

He had 27 workdays in the US in 2009-10 and his US tax return preparers have told him that he needs to pay US Federal and State tax in relation to these workdays. They say that the income related to these workdays is considered US sourced income and cant be offset by foreign tax credit or exclusions. In these situations, they have told him that he will need to pay the tax in the US and claim a foreign tax credit or exclude the US sourced income from taxation on his 2009/10 UK tax return.

Can someone explain how this tax credit is claimed in his 2009-10 UK tax return as presumably he will not have actually paid his US tax bill on these workdays in the 2009-10 tax year. Will he need to claim a tax credit in his 2010-11 UK tax return (i.e. the year he actually paid his US tax bill) or can he exclude the 27 workdays from his 2009-10 tax return? Where on the tax return does he claim this double tax relief (page 6 of the Foreign pages?).

Many thanks!

Cook_County

This is a pretty standard issue. The US preparer or the UK adviser may both have got things wrong though because generally speaking one "resources" the income relating to US workdays as foreign source on the US return to avoid double taxation.

I'd suggest finding a dual US/UK qualified adviser to get the correct answer globally as saving UK tax may simply increase US tax or the other way around.