Effects of residence/domicile: departures during a tax year - for years up to and including 2012-13
Under paragraph 2 of ESC D2 the concessionary treatment is available only where the taxpayer was not resident and not ordinarily resident in the United Kingdom for the whole of at least four out of the seven years of assessment immediately preceding the year of assessment in which he or she left the United Kingdom. If this condition is met then the taxpayer is not chargeable to Capital Gains Tax on gains from disposals made AFTER the date of departure.
Where the taxpayer has been resident or ordinarily resident in any part of four or more of the seven preceding years then gains from disposals made in the year of departure, after the date of departure, are chargeable to Capital Gains Tax, whether or not the taxpayer ever returns to the UK to become resident again.
ESC D2 does not apply for 2013/14 and later years following the introduction of the Statutory Residence Test. Guidance on the Statutory Residence Test can be found in the RDR3 Guidance Note: Statutory Residence Test (SRT).