Illustration - DTR

In this lesson

1. 0:00 Introduction to DTR from company perspective
2. 0:49 Computing corporation tax payable
3. 1:17 Understanding and applying double taxation relief

About this lesson

This illustration walks through a practical example with Singer Limited, showing you how to gross up overseas interest received net of foreign tax, compute the total taxable profit, apply the main rate of corporation tax, and then claim DTR by deducting the lower of UK or overseas tax paid. This is a core technique for handling overseas income in corporation tax computations across ACCA and CIMA qualifications. The worked example demonstrates the step-by-step process: starting with UK trading profits and net overseas interest, grossing up the overseas figure to its pre-tax amount, calculating corporation tax at 25%, and then determining which tax (UK or overseas) is lower to claim as relief. You'll see that the shortcut approach—comparing tax rates directly rather than calculating both figures—can save time in an exam without losing marks, provided you explain your reasoning clearly.

Duration: 2m