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HMRC internal manual

Capital Gains Manual

Effects of residence and domicile: temporary residence

For the years up to and including 2012/13, if an individual who has previously been neither resident nor ordinarily resident in the UK visits this country for a short period he or she will not normally come within the charge to Capital Gains Tax. If they are visiting the country for some temporary purpose only and not with any view to or intention of establishing residence in the country they are only liable to Capital Gains Tax if the period or periods they spend in the UK in a particular year of assessment total more than six months.

For example, Mr A and Mrs B both arrive in the UK on 1 January 2009. Neither has had any previous connection with the UK or been regarded as resident or ordinarily resident in the UK in the five years preceding their arrival here. Both are still in the UK on 5 April 2009.

Mr A intends to settle in the UK. He is therefore treated as resident from the date of his arrival. Strictly he is assessable on all gains realised in 2008-09 but ESC/D2, see CG25720, is applied. As a result for 2008-09 he is only assessable on gains realised in the period 1 January 2009 to 6 April 2009.

By contrast Mrs B is only visiting the UK for an extended holiday. As she has no intention of settling here and as the period she spends here in 2008-09 is less than six months she is not chargeable in respect of any gains realised at any time during 2008-09.

For 1993-94 and later years TCGA92/S9 (4) says that the decision on whether or not a person is in the UK for some temporary purpose only should be made without regard to whether they have living accommodation available to them in the UK.

For 2013/14 and subsequent years a Statutory Residence Test for individuals was introduced. Broadly an individual will either be resident or not-resident in the UK for a year of assessment. However in certain circumstances a year of assessment may be split into a UK residence period and an overseas residence period see CG10978.

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