Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Unilateral relief definition

What does Unilateral relief mean? In practice, unilateral relief is the mechanism by which a UK‑resident taxpayer obtains credit against UK tax for foreign tax paid on the same income (and, in some cases, gains) where no relief is available under a double taxation agreement. In UK direct tax, the concept is statutory (including the foreign tax credit rules in TIOPA 2010) and generally operates as a credit limited to the amount of UK tax attributable to that income; it cannot exceed that cap or duplicate treaty relief. The taxpayer must evidence the foreign tax paid and meet source/matching conditions, with claims made through...

UK Unilateral Relief for Foreign Tax: Credit Rules 1–9, Eligibility and Limits, Treaty Interaction, Dividends and Underlying Tax, Branches and Permanent Establishments, Spared Tax, and Deduction Alternative

Published by a LexisNexis Tax expert

Practice notes

Unilateral relief

Unilateral relief, akin to double tax relief, seeks to alleviate Double taxation. Provided particular conditions are met and within specified limits, unilateral relief:

is usually granted as a credit set against, and thus reduces, UK income tax, corporation tax or Capital gains tax for overseas tax borne on the same income or gain
is available where relief cannot be obtained under a Double tax treaty (or a treaty exists but does not extend to the relevant category of income or foreign tax, such as local or provincial taxes) and
is available to:
- UK tax resident persons, and
- foreign resident persons whose UK branch or agency or, for a company, UK permanent establishment, suffers third country tax (that is, foreign tax imposed by a territory other than its territory of residence), but
does not apply to foreign tax charged on income or gains attributable to a foreign exempt permanent establishment of a UK tax resident company

Unilateral relief is not available for foreign dividends that are exempt from UK corporation tax...

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Web page updated on 22/05/2026

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