Which form you use depends on which side you are on
There are two claim routes, and mixing them up wastes months. A UK resident relieving foreign tax on worldwide income claims through Self Assessment on the SA106 foreign pages: you report the foreign income, the foreign tax suffered and your Foreign Tax Credit Relief claim, all filed with the SA100. Form DT-Individual does the opposite job: it is for a resident of a treaty country claiming relief from UK Income Tax on UK-source pensions, purchased annuities, interest and royalties, both at source and as a repayment of tax already deducted. It is not a general foreign-relief form, so do not reach for it if you live in the UK.
How the credit is calculated, and why it is capped
Foreign Tax Credit Relief is the lower of two figures: the foreign tax actually paid or allowed under the treaty, and the UK tax due on that same income. That second figure is a hard cap, worked out separately for each source. If the foreign rate is higher than your UK rate on the item, the excess foreign tax cannot reduce your UK bill and HMRC will not repay it; your only route is to recover it from the foreign authority, often by claiming the treaty rate there. You can instead elect to deduct the foreign tax from the foreign income rather than take a credit, but that only helps in narrow cases such as where the UK tax on the item is nil or you have losses. Our guides to foreign rental income and foreign pensions show the calculation for the two most common sources.
Treaty relief, unilateral relief and the tie-breaker
Treaty relief is the first port of call: the UK has more than 100 agreements that allocate taxing rights and can reduce foreign withholding at source. Where no treaty covers the income, unilateral relief under TIOPA 2010 fills the gap, but it is capped to the treaty-equivalent amount, so the route rarely changes the figure. If both countries treat you as resident, the treaty tie-breaker decides in a fixed order: permanent home, centre of vital interests, habitual abode, nationality, then mutual agreement, stopping at the first test that resolves it. Horizon runs the whole claim, the per-source SA106 figures and the credit-versus-deduction test on fixed fees agreed upfront; book a free clarity call at /book and we will tell you what your relief is worth before you commit.