INTM332210 - Double Taxation applications and claims - Subject to tax: Background

The expression 鈥渟ubject to tax鈥� usually means that the person must actually pay tax on the income in their country of residence.

However, a person is still regarded as 鈥渟ubject to tax鈥� if, for example, he or she does not pay tax because their income is sufficiently small that it is covered by personal allowances that are available to set against liability to tax in the other country.

A person is not regarded as 鈥渟ubject to tax鈥� if the income in question is exempted from tax because the law of the other country provides for statutory exemption from tax. For example

  • the income is that of a charity
  • the income is that of an exempt approved superannuation scheme (pension fund).

In such cases the 鈥渟ubject to tax鈥� condition is not met and relief is not allowable.