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HMRC internal manual

Capital Gains Manual

Remittance basis: the annual exempt amount

In a year for which the remittance basis is claimed (but not one in which it is used without the need to make a claim) there is no entitlement to the annual exempt amount (“AEA”; TCGA92/S3(1A)). Note that there do not have to be any foreign chargeable gains in that year for the AEA to be denied: the claimant may have foreign income to which the remittance basis will apply as well as gains on UK assets which are charged on the arising basis- the AEA will not be available to reduce the chargeable amount.

Further, if an individual has elected for his or her foreign losses to be allowable (see CG25330A), the AEA is not available to frank chargeable gains which are treated as accruing in a year after the associated foreign chargeable gains arose by virtue of the remittance basis, even if there is no election to use the remittance basis in that later year (TCGA92/S3(5C(aa))).