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HMRC internal manual

Capital Gains Manual

Arrival in and departure from UK: meaning of ‘temporary non-residence’ - year of departure 2012-13 or earlier

Section 10A TCGA 1992

Section 10A applies to any individual who left the UK to take up residence abroad but who later resumes UK residence, and who:

  • was tax resident in the UK for any part of at least four out of the seven tax years immediately preceding the year of departure, and
  • was not resident or not ordinarily resident in the UK for a period of less than five full tax years, and
  • disposed of assets in an intervening year (see CG26155) year when he was not resident in the UK.

Where these conditions are satisfied, the individual will be liable to tax on any gains realised on those assets whilst abroad as if the gains accrued in the tax year in which the individual returns to the UK. See CG26111.

Section 10A applies only to gains and losses which accrue in an intervening year

As for gains which accrue during that part of the tax year of departure when the individual is not resident, TCGA92/S2 says that those gains are chargeable. However, extra-statutory concession D2 (ESCD2) may apply to remove those gains from charge. The circumstances in which ESCD2 applies are described in CG26301 and CG26305. The conditions for ESCD2 to apply are consistent with those for section 10A to apply, as in each case they are intended to prevent avoidance of tax through temporary non-residence.