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Cost Allocation Under TIOPA 2010 s44

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Foreign income taxed as trading income


Select from the following headings:

Background | Developing the schedule | Completing the Schedule | Standard Sub-Schedules | Carry Forward | Related Errors


Background

The schedule has been designed to facilitate the allocation of allowable trade expenses to foreign income taxed as trading income in accordance with the provisions of TIOPA 2010, s44

The schedule only applies from 2007 onwards.

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Developing the schedule

The schedule is developed automatically when the Foreign income taxed as trading income schedule is developed from any D schedule. It is stored within the 'A' group of schedules.

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Completing the schedule

The user should first complete the Foreign income taxed as trading income schedule and the software will automatically load the data into the relevant cells on this schedule.

Costs must be entered on the schedule; these will then be deducted from the income in calculating the foreign tax credit in respect of trade income.

The schedule has been designed to deal with:

The total costs to be apportioned on the basis of trade income need to be entered in the data entry cell in the Total Income row and (Costs) pro rata by income column. Any other trade income against which the costs are to be allocated should be entered into the Credited to P/L column and Other UK income row. The costs are then apportioned automatically on the basis of cost x income/total income.

Direct costs need to be entered in the Direct (costs) column of the source to which they relate.

Other apportioned costs need to be entered in the Apportioned (costs) column either directly or posted from a non standard supporting schedule showing the calculation basis of the apportionment.

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Standard sub-schedules

This schedule has no standard sub-schedules. The Foreign income taxed as trading income populates many of the cells on this schedule.

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Carry forward

 

On carry forward, this schedule is automatically developed in the subsequent computation if it is present in the prior year computation.

 

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Related errors

Error
How to solve it
Costs must be negative!

This error results from the sign conventions used within the software. This error can be resolved by clicking the

button.

 

 

 

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