International agreements
10. Has the UK entered into one or more double taxation treaty(ies) with other jurisdictions, so that tax suffered in your country is deducted from the other jurisdiction's tax liability and vice versa?
In relation to ICT and CGT, the UK has entered into double taxation treaties with many countries.
Double taxation treaties can provide for:
- Certain foreign income and gains to be exempt from UK taxation.
- A credit to be given against an individual's UK tax liability (or vice versa). For example, under the UK's double taxation treaty with the US, the country in which the recipient is resident charges tax on interest, irrespective of the source of the interest.
In relation to IHT, the UK has entered into several double taxation treaties. These generally avoid double taxation where both countries seek to tax the same assets on an individual's death.
The pre-1975 double taxation treaties with India, Pakistan, France and Italy can offer specific IHT advantages for an individual who is domiciled in any of those countries but who is deemed domiciled in the UK (see Question 5). On the individual's death, his non-UK assets will not generally be taxed in the UK, even though the deemed domicile rules would normally result in an IHT charge on his worldwide estate.