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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 UK: temporary non-residence: effect of TCGA92/S10A and ESCD2 - year of departure 2012-13 or earlier

The provisions of TCGA92/S10A and ESCD2 apply to losses which arise during periods of temporary non-residence as they do to gains. Subject to the relevant conditions being satisfied, such losses will be allowable losses available to be set against chargeable gains.

For detailed guidance on ESCD2, see CG25720+.

Year during all of which an individual is not UK resident and not ordinarily resident in the UK

Where section 10A applies, gains accruing in a tax year during the whole of which an individual is not resident or ordinarily resident in the UK are chargeable as if they were gains accruing in the year of return to the UK, ie the year in which the individual resumes residence. ESCD2 will not apply in these cases, so the gain will be charged to tax in the year of return. The rate of capital gains tax changed during 2010-11 and a transitional provision in Finance (No.2) Act 2010 ensures that chargeable gains treated under section 10A as accruing in tax year 2010-11 are treated as accruing before 23 June 2010, see also CG25313.

Year of departure

Where ESCD2 does not apply, TCGA92/S2 applies to all chargeable gains accruing in the year of assessment in which an individual leaves the UK (the year of departure) and so those gains will be chargeable in that year, whether the disposals were made before or after the date of departure, see CG26301.

Year of return

Where ESCD2 does not apply, TCGA92/S2 applies to all chargeable gains accruing in the year of assessment in which an individual returns to the UK and so those gains will be chargeable in that year, whether the disposals were made before or after the date of return, see CG26305.