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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: exceptions to the exclusion from section 10A - year of departure 2013-14

Sometimes the exclusion from the scope of TCGA92/S10A afforded to gains accruing during a period of temporary non-residence on assets acquired in the period of temporary non-residence is not appropriate. Some assets acquired by an individual in this period may have a connection with an earlier residence period. These exceptional assets fall under three headings (see below). Where they apply, any gains or losses on the disposal of the assets during the period of temporary non-residence are treated as chargeable in the tax period of return, that is to say they are within the scope of section 10A.

Certain disposals treated as giving rise to neither a gain nor a loss (TCGA92/S10AA(1)(b)-(d))

Where the asset was acquired from a spouse or civil partner such that no gain and no loss is deemed to accrue by virtue of TCGA92/S58, any gain or loss accruing to the transferee on a disposal during a period of temporary non-residence is within the scope of section 10A.

Where the asset was treated as having been disposed of and reacquired by a trustee on the occasion of a person becoming absolutely entitled to it as against the trustee, and no gain and no loss is deemed to accrue on that disposal by virtue of TCGA92/S73 (death of life tenant: exclusion of chargeable gain), any gain or loss accruing on a disposal of the asset during a period of temporary non-residence is within the scope of section 10A.

Where the asset was a work of art etc acquired by way of a gift or a disposal of settled property such that no gain and no loss accrues to the person making the disposal because of TCGA92/S258(4), any gain or loss accruing to the recipient on a disposal during a period of temporary non-residence is within the scope of section 10A.

Where the asset disposed of during a period of temporary non-residence is an interest created or arising under a settlement, any gain or loss on the disposal is within the scope of section 10A.

In some circumstances the consideration given by a taxpayer for an asset is treated as reduced, with the result that the gain on another asset is also reduced or eliminated and is ‘rolled-over’ into the asset in question. Where this happens under the following statutory provisions, a gain or loss accruing on a disposal of the asset carrying the rolled-over gain during a period of temporary non-residence is within the scope of section 10A.

  • TCGA92/S23(4)(b) or TCGA92/S23(5)(b) (compensation and insurance), see CG15700+
  • TCGA92/S152(1)(b), TCGA92/S153(1)(b) (business assets roll-over relief), see CG60250+
  • TCGA92/S162(3)(b) (transfer of business to a company), see CG65700+
  • TCGA92/S247(2)(b) or TCGA92/S247(3)(b) (compulsory acquisition), see CG61920+.