Personal Tax

Deemed domicile ― rebasing for capital gains tax (2017/18 onwards)

Produced by Tolley
  • 19 Oct 2021 22:41

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

  • Deemed domicile ― rebasing for capital gains tax (2017/18 onwards)
  • Introduction
  • Deemed domicile tests for income tax and CGT
  • Qualifying individuals
  • Qualifying assets
  • Rebasing is automatic

Deemed domicile ― rebasing for capital gains tax (2017/18 onwards)


Fundamental changes to the tax regime for non-domiciled individuals were introduced from 6 April 2017. They involve deeming an individual to be UK domiciled for tax purposes even though he may be non-domiciled in the UK under general law. The rules apply for income tax, CGT and IHT.


  1. caught by the deemed domicile 15-year rule in 2017/18 can rebase their foreign chargeable assets for CGT purposes as at 5 April 2017

  2. have a one-off opportunity to clean up existing mixed funds, see the Remittance basis ― mixed fund cleansing (April 2017 to April 2019) guidance note

Whilst both these measures are good news for the non-domiciliary, they are not available for all non-domiciliaries and the rules contain traps for the unwary. Great care is needed in advising clients.

This guidance note explores rebasing for CGT in detail. For a discussion of the broader rules as they apply to individuals, including the IHT changes, see the Deemed domicile for income tax and capital gains tax (2017/18 onwards) guidance note. You are recommended to read that guidance note before continuing.

Note that the professional bodies have compiled some guidance for advisers on CGT rebasing in the form of questions and answers. This was published in March 2018 and has been sent to HMRC for review. It is hoped that the revised version, which includes comments from HMRC will be published later in the year.

Deemed domicile tests for income tax and CGT

As the understanding of who qualifies for CGT rebasing depends on familiarity with the deemed domicile tests for income tax and CGT, they are set out here.

For income tax and CGT, an individual is treated as deemed domicile if he meets either:

  1. Condition A ― was born in the UK with a UK domicile of origin, subsequently left the UK and acquired a non-UK domicile of choice and later becomes resident in the UK, or

  2. Condition B ― he has

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