Overseas capital loss election

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

  • Overseas capital loss election
  • Introduction
  • The election
  • Effect of the election
  • Remittances in a later tax year
  • Exceptions
  • How the election is made
  • Reporting
  • Tax planning for the overseas loss election
  • Interaction with the deemed domicile rules from 6 April 2017

Introduction

This note explains a particular election that can be made by non-domiciled individuals who claim the remittance basis. For an explanation of the meaning of non-domiciled, see the Domicile guidance note. For an introduction to the remittance basis, see the Remittance basis ― overview guidance note.

For details of the interaction with the deemed domicile provisions from 6 April 2017, see the end of this guidance note.

The election

In the absence of an election, there is no relief for the foreign capital losses of a non-domiciled individual who has accessed the remittance basis, as it is not possible to remit a loss.

TCGA 1992, s 16ZA(3)

From 2008/09 onwards, a non-domiciled individual who claims the remittance basis under ITA 2007, s 809B, can make a one-off foreign capital loss election. The capital loss election must relate to the first tax year for which a remittance basis claim is made.

TCGA 1992, s 16ZA

The deadline for the election is four years from the end of the relevant tax year. Therefore, individuals who claimed the remittance basis for 2008/09 (the first year in which the rules changed) had until 5 April 2013 to make the election:

Tax year of first remittance basis claimDeadline for making the election 
2008/095 April 2013 
2009/105 April 2014 
2010/115 April 2015 
2011/12

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