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HMRC internal manual

Capital Gains Manual

Effects of residence/domicile: exemption: double taxation agreements

The legislation of foreign countries may charge tax on gains which are also assessable under UK capital gains legislation. In order to reduce the burden of double taxation in these circumstances relief may be given by a number of methods, see INTM15140. The relief may be given as the result of a double taxation agreement. Where relief is not given under such an agreement the UK gives relief to UK residents on a unilateral basis.

The terms of a double taxation treaty may give the exclusive right to tax certain gains to the foreign country. When this happens those gains are effectively outside the charge to Capital Gains Tax. The terms may apply to gains realised by another person but assessable to some extent on a UK resident, eg certain gains realised by non resident companies as referred to in CG11020 above, as well as to gains realised directly by a person. See also CG57380.