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HMRC internal manual

Capital Gains Manual

From
HM Revenue & Customs
Updated
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Exemptions: persons who are not chargeable

TCGA92/S2, TCGA92/S10, TCGA92/S10B & TCGA92/S276

Persons, including companies, are not chargeable to tax in respect of chargeable gains if, in the year of assessment or accounting period in which the disposal is made, they are neither

  • resident nor, in the case of a person other than a company, ordinarily resident* in the UK, nor
  • non-resident and in the case of a person other than a company carrying on a business in the UK through a branch or agency, see CG25500+, nor
  • non-resident and in the case of a company carrying on a trade in the UK through a permanent establishment, see CG42100+, nor
  • associated with exploration or exploitation activities in a designated area of the continental shelf.

The exemption is extended by ESC/D2, see CG25720+. If an individual is only a temporary resident in the United Kingdom, see CG25100+.

An exception to the these general rules applies when a company disposes on an interest in a residential property and the disposal gives rise to ATED (Annual Tax on Enveloped Property) related gains or losses. Detailed guidance on ATED related gains and losses can be found at CG73600+.

A Statutory Residence Test for individuals was introduced for years from 6/4/2013.

  • For 2013/14 and subsequent years ordinary residence does not need to be considered.

Guidance on the Statutory Residence Test can be found in the RDR3 Guidance Note: Statutory Residence Test (SRT).

TCGA92/S12

Gains accruing on the disposal of foreign assets by an individual who is not domiciled in the UK are taxed in the same way as gains on UK assets, unless the remittance basis applies. Where the remittance basis applies, gains on foreign assets are not chargeable gains unless

  • the gains are remitted to the UK, and
  • the individual is resident or ordinarily resident in the UK.

See CG25300+.

  • For 2013/14 and subsequent years ordinary residence does not need to be considered.