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HMRC internal manual

Capital Gains Manual

Arrival in and departure from UK: temporary non-residence: losses attributed to participators in non-resident companies - year of departure 2013-14 or later

Losses on the disposal of an asset by a non-resident company are only attributed to a participator under TCGA92/S13 in certain circumstances, TCGA92/S13(8). A loss is attributed only if it will be set off against a gain attributed to the same person from the same company in the same residence period or against a gain made by another non-resident company which has been attributed to the taxpayer in the same residence period, see CG57250+, in particular, CG57295-CG57299.

TCGA92/S10A can apply to losses which are attributed to a UK resident participator under section 13 just as it applies to attributed gains, so that the losses are treated as accruing in the period of return to the UK. However, the restriction to the attribution contained in TCGA92/S13(8) has a parallel at TCGA92/S10A(7). This restricts the amount of losses within the scope of section 10A to the amount which would be available under section 13(8) to set against attributed gains. Losses of a residence period in excess of the gains attributed in that residence period are not within the scope of section 10A.


Mrs. Adams, who has lived in the UK all of her life, leaves the UK on 1 September 2018 to take up a four year contract of employment abroad.

She resumes tax residence in the UK on 31 August 2022.

Mrs Adams has owned all 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 temporary non-residence the company makes a number of disposals. Gains and losses accrue as follows:

3 May 2019 gain £20,000 (year of assessment 2019-20)

23 October 2019 loss £ 5,000 (year of assessment 2019-20)

14 July 2020 loss £10,000 (year of assessment 2020-21)

4 September 2021 gain £20,000 (year of assessment 2021-22)

Mrs Adams fulfils all of the conditions for Section 10A to apply, see CG26540. Under Section 10A(2) all the gains which would have been treated as accruing to Mrs Adams in the period of temporary non-residence years if she had been resident in those years are treated as accruing to her in the period 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 residence period.

Mrs Adams is therefore chargeable in the period of return as follows

  • net gains of £15,000 (gain £20,000 less loss £5000) from 2019-20
  • a gain of £20,000 for 2021-22.

The total gains chargeable are therefore £35,000.

The loss arising in 2020-21 is not allowable because no gains from that residence period (in this case a year) were attributed to her.