Credit relief is given for the lower of the overseas or UK taxes payable. Broadly, the tax credit available in the UK is equal to the full amount of the overseas tax borne, limited to the UK tax liability on the same income or gain net of relevant expenses (E6.433–E6.433C). In accordance with the 'root income' principle discussed at E6.431, relief is given for foreign tax against UK tax computed by reference to the same income or gain, irrespective of the year or period for which it is assessed in the UK.
The foreign income and gains and foreign tax paid should be converted into sterling in order to be taxed in the UK. The exchange rate used to convert the income or gain may not be same exchange rate used to convert the
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