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Unilateral credit relief is a form of credit relief and may be used if relief is not available under a double tax treaty. For example where there is no double tax treaty between the UK and the other country or where the particular category of income or gain is not covered in the treaty¹. Unilateral credit relief is not allowed where credit could be claimed under a double tax agreement².

Unilateral relief is only possible where the foreign tax corresponds to the UK tax³. For example, it is possible to obtain relief from UK income tax where the foreign tax is a tax on income and corresponds to UK income tax. If this is not the case then unilateral relief is not available for the foreign tax suffered.

The basic rule for unilateral relief is that the relief available is the lower of the UK tax due on that source of income and the foreign tax suffered⁴.

In summary, unilateral credit relief cannot be claimed if⁵: