Tax pool and foreign tax deductions

Going round in circles here! We have started using a different tax software provider and I am struggling with the way it calculates the tax pool in relation to foreign tax deducted from dividends paid in the US (which incidentally are at 15% so allowable in terms of the DTA) as opposed to how the previous system dealt with it. Essentially, my question is - does the foreign tax paid go into the tax pool or not? I know tax credits don’t but my research produces both yes and no answers as to tax actually suffered. I should mention, it is for a UK Trust.
Guidance gratefully received

My understanding is that it does not go into the tax pool, in the same way that the previous notional tax credit on dividend income never went into to the tax pool. The tax pool is only for real UK tax paid, since it can be repaid to the beneficiaries. Hence the tax pool charge if the pool does not sufficiently frank the 45% tax credit attaching to a discretionary income distribution. However, I must confess that I am mystified as to whether the current restriction on the 7.5% dividend tax going into the pool is deliberate or just sloppy drafting because it too is real UK tax paid (unless covered by a foreign tax credit).
Citroen Wells

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Any foreign tax paid by trustees does not enter the tax pool.

Malcolm Finney

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Thank you for confirming :slight_smile:

You may wish to consider TIOPA s111 relief on distributions, although the claim procedure is rare and slightly uncertain (see TIOPA 2010, s111 relief )