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HMRC internal manual

Capital Gains Manual

Arrival in and departure from UK: temporary non-residence: losses: example - year of departure 2012-13 or earlier

Mrs. Adams, who has lived in the UK all of her life, leaves the UK on 1 September 2008 to take up a four year contract of employment abroad.

She resumes tax residence in the UK on 31 August 2012.

Mrs Adams has owned all of the shares in a company resident in Jersey for many years. The company owns a portfolio of shares and a number of properties. During Mrs Adams’ period of non-residence the company makes a number of disposals. Gains and losses accrue as follows:

3 May 2009 gain £20,000 (year of assessment 2009-10)

23 October 2009 loss £ 5,000 (year of assessment 2009-10)

14 July 2010 loss £10,000 (year of assessment 2010-11)

4 September 2011 gain £20,000 (year of assessment 2011-12)

Mrs Adams fulfils all of the conditions for Section 10A to apply, see CG26156. Under Section 10A(2)(b) all the gains which would have been treated as accruing to Mrs Adams in the intervening years if she had been resident in those years are treated as accruing to her in the year of return. Losses are attributed to her, and section 10A applies to them, to the extent that they may be set against gains attributed in the same year.

Mrs Adams is therefore chargeable in the year of return, 2012-13 as follows

  • net gains of £15,000 (gain £20,000 less loss £5000) from 2009-10
  • a gain of £20,000 for 2011-12.

The total gains chargeable are therefore £35,000.

The loss arising in 2010-2011 is not allowable because no gains from that year were attributed to her.