Taxes Consolidation Act 1997 Schedule 24 paragraph 5A

Limit on total credit - universal social charge

Paragraph 5A limits the amount of foreign tax credit that may be set against an individual's universal social charge (USC) liability on foreign income, and sets out how the available credit is calculated and apportioned between jointly assessed spouses or civil partners.

• The credit against USC on any foreign income source cannot exceed the amount produced by applying the individual's effective rate of USC to that foreign income.
• The credit available against USC is determined by taking the total foreign tax (including underlying tax), subtracting the credit already allowed against income tax, and subtracting the tax value of any reduction given in the income tax computation.
• Where spouses or civil partners are jointly assessed, the USC credit on a shared foreign income source must be split in proportion to each person's share of that income, and any excess credit for one individual cannot be offset against the other's USC liability.
• A foreign tax credit against USC cannot give rise to a refund of USC.