Foreign capital gains and losses

By Tolley
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The following Personal Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Foreign capital gains and losses
  • Resident and domiciled in the UK
  • Not domiciled in the UK
  • Not resident in the UK
  • Foreign capital losses
  • Reporting foreign capital gains and losses

This note discusses the capital gains tax (CGT) position of the following categories of people:

  • resident and domiciled in the UK
  • resident but not domiciled
  • not resident in the UK

The note does not cover the position of temporary non-residents, who are those people who are no longer resident but remain within the scope of the UK CGT regime. See the Temporary non-residence and Capital gains tax on leaving the UK guidance notes.

Guidance on reporting foreign capital gains and losses is given at the end of this note.

Resident and domiciled in the UK

An individual who is UK resident and domiciled is taxed on his worldwide capital gains arising in the tax year. Any capital losses can be set against his gains, see the Use of capital losses guidance note.

TCGA 1992, s 2

Residence status is determined in the same way for CGT and income tax, and is discussed in the Residence - overview guidance note.

In other words, for the person who is UK resident and domiciled, it does not matter whether the gains are from foreign assets or UK assets. The only difference between UK and foreign gains is that, if he has suffered foreign tax on the capital gain, he can normally claim double tax relief, see the Foreign tax relief guidance note and HMRC Helpsheet HS261 .

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