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My client a UK resident and domiciled individual bought a portfolio of residential properties in Germany in 2014. Initially he made losses due to higher than expected finance costs but he has recently sold some of the properties and made capital gains. He used the sale proceeds to repay debt so the portfolio is now profitable.
For German tax purposes the losses were fully offset against the capital gains (because Germany taxes short-term capital gains as income) so the client is now paying German income tax on the profits but in the UK the losses are carried forward against future income from the properties.
The German tax year is the calendar year and payments on account are required during the year before the tax return is submitted.
My question for readers is how can the client obtain relief for the German tax paid? Credit relief is...
