UK Foreign Tax Credit Relief Calculator 2026/27
UK residents with foreign income face source-country tax + UK tax. FTCR allows offset up to UK tax liability on same income.
FTCR scenarios
| Income type | Income (£) | Foreign tax | UK tax pre-FTCR | FTCR | UK net | Total worldwide | Note |
|---|---|---|---|---|---|---|---|
| Spanish villa rental | £20,000 | £4,800 | £8,000 | £4,800 | £3,200 | £8,000 | Spanish 24% IRNR + UK higher-rate. FTCR full |
| US dividend | £5,000 | £750 | £1,788 | £750 | £1,038 | £1,788 | US 15% WHT with W-8BEN + UK higher dividend rate |
| US employment (UK transferee) | £50,000 | £12,500 | £20,000 | £12,500 | £7,500 | £20,000 | 25% US federal + UK higher-rate. FTCR limits to UK liability |
| Australian dividend | £8,000 | £0 | £2,860 | £0 | £2,860 | £2,860 | Australia 0% to UK resident treaty + UK higher dividend |
| UAE rental (no tax country) | £30,000 | £0 | £12,000 | £0 | £12,000 | £12,000 | UAE 0% + full UK tax. No FTCR |
Frequently asked questions
What is FTCR?
Foreign Tax Credit Relief allows UK resident to offset foreign tax against UK tax on same income. Prevents double taxation.
FTCR limit
FTCR capped at UK tax due on same source. If foreign tax higher, excess lost (cannot offset other UK income).
How to claim
Self Assessment SA106 (foreign income). Show foreign income + foreign tax + treaty position. SA computation applies FTCR automatically.
Treaty rates
UK Double Taxation Agreements with 130+ countries. Reduces source-country WHT. Examples: US 15% dividend (vs 30% standard), Australia 0%, France 12.8%.
Evidence required
Foreign tax payment confirmation (statement / receipt), W-8BEN copies, treaty rate confirmation, GBP conversion at HMRC rates.