Capital gains tax on leaving the UK

By Tolley

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

Capital gains tax on leaving the UK
Starting point
Individuals with a year of departure of 2013/14 or later
Effect of being treated as a temporary non-resident (year of departure 2013/14 onwards)
Individuals with a year of departure of 2012/13 or earlier
Effect of being treated as a temporary non-resident (year of departure 2012/13 or earlier)
Interaction with NRCGT rules
Interaction with deemed domicile rules for CGT
Reporting in year of return after temporary non-residence
Keeping records

Starting point

When dealing with the capital gains tax (CGT) implications of an individual leaving the UK, the starting point is to establish whether or not the individual is UK resident.

Generally, non-residents are not subject to UK CGT on disposals of chargeable assets (whether or not these assets are sited in the UK). However this is subject to two main exclusions:

•the temporary non-residence rules, which apply to all chargeable assets held prior to departure which are subject to disposal whilst the individual is non-resident for a short period
•the non-resident capital gains tax (NRCGT) rules, which were introduced from 6 April 2015 and apply to disposals of UK residential property only

TCGA 1992, s 2

The temporary non-residence rules in the context of CGT are explained below. Note that the rules changed where the ‘year of departure’ (defined below) is 2013/14 or later. This means that tax advisers need to be aware of the pre-2013/14 rules that, depending on the circumstances, may apply to some returners until 5 April 2018, as well as the rules for those with a year of departure of 2013/14 or later. There are important differences between the old rules and the new rules, which are also discussed below.

FA 2013, Sch 45, Part 4; FA 2013, Sch 45, para 158

The NRCGT rules are considered in detail in the Capital gains tax charge on UK residential property owned by non-residents guidance note, however the interaction with the temporary non-residence rules is considered below.

To find out whether the asset is a ‘chargeable asset’ for CGT, see the Introduction to capital gains tax and Exempt assets for capital gains tax guidance notes.

To determine the individual’s residence status in the tax