We have a scenario where we have South African trust of which an individual has a life interest in 1/3 of the fund. He is UK resident.
The trust was created by his mother who is South African resident and his siblings, who also South African resident, have a life interest in the remainder of the fund.
The trustees receive investment income. They complete a South African tax return and pay tax there.
The UK resident individual has also reported his share of the income and his share of the tax which trustees have paid in South Africa on his UK tax return.
However, HMRC has denied him relief for the South African tax on the basis that he is not entitled to it.
This seems odd. There doesn’t seem to be anything in the UK/South African DTA suggesting this to be the case.
Any comments would be gratefully received.
Andrew Magilton
TFO Tax LLP