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US and UK Year End Planning 2018: Accelerating payment of non-us taxes

Business Tax - 29 Nov 2018

It may be useful to pay UK tax otherwise due by 31 January 2019 before 31 December 2018 to maximise foreign tax credits available to offset against your US income tax liability.

  • As is always the case, if you realised significant capital gains or investment income (including carried interest) since 6 April 18, the position should be reviewed to determine if a payment should be made by 31 December 2018 in respect to those items.  
  • Where an accelerated UK tax payment might not have been necessary in prior years, for example, if you had existing excess foreign tax credit carryovers, for 2018 additional foreign tax credit “baskets” have been introduced and which need to be considered.  Previously you might have only considered the General and Passive baskets (General essentially being for earned or high taxed income, and Passive essentially being for low taxed investment income and gains); for 2018 the additional baskets are for foreign branch income and for shareholders in 10% or more owned foreign corporations. If either of these are relevant to your situation it advisable that you discuss this area with your Frank Hirth advisor.
  • It may also be advantageous to advance UK corporate taxes and other foreign taxes

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Frank Hirth's offices will close for the holidays at the close of business on Monday 24 December 2018 and will re-open on Wednesday 2 January 2019.

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Lucy Townsend

Lucy Townsend

Private Client Associate Director

T: +44 (0) 20 7833 3500
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Office: London