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HMRC internal manual

Capital Gains Manual

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HM Revenue & Customs
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Arrival in and departure from the UK: ESCD2: example 1 (short term absence) - to 5 April 2013

A Colonel in the Army has been resident in the UK since birth and is posted abroad for two years commencing on 1 September 2009 and returning on 31 August 2011. As he is absent for the whole of 2010-11 and he does not breach any of the other conditions in HMRC6, he is treated as not resident and not ordinarily resident for the whole of his period of absence. He was resident in the UK for all of the seven years preceding 2009-10 and so paragraph 2 of ESCD2 does not apply the concessionary treatment to that year. Any gains he realises in 2009-10 in the period from 1 September 2009 to 5 April 2010 are chargeable to capital gains tax, see CG25740.

Any gains he realises in 2010-11 may be chargeable in the year he resumes residence in the UK if TCGA92/S10A (temporary non-residents) applies. For guidance on section 10A, see CG26100+. They will not be chargeable in 2010-11 because he is not resident or ordinarily resident in the UK in that year.

He is chargeable on gains realised in 2011-12 whether they are realised in the period 6 April 2011 to 31 August 2011 (when he was not resident in the UK) or in the period 1 September 2011 to 5 April 2012 (when he was). As this is a year of arrival in the UK for him and as he was resident and ordinarily resident in the UK at some time in the five tax years preceding 2011-12 he does not satisfy the conditions necessary for paragraph 1 of ESCD2 to apply for that year, see CG25730.