Double Taxation Relief (DTR) ensures that income earned in a foreign country is not taxed twice—once in the country where the income is earned and again in the investor’s home country.
How It Works:
If an investor pays foreign tax on overseas income, they can offset that tax liability against their domestic tax bill.
The UK has Double Taxation Agreements (DTAs) with multiple countries to prevent double taxation on dividends, interest, and capital gains.
Example:
A UK investor receives £10,000 in dividends from US stocks and is charged a 15% withholding tax in the US.
Under a UK-US tax treaty, the investor receives a tax credit for the amount paid in the US, reducing UK tax liability.
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