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HMRC internal manual

Capital Gains Manual

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Arrival in and departure from UK: temporary non-residence: interaction with DTA’s - impact on period of temporary non residence- returning to the UK examples - year of departure 2013-14 or later

Example 1

Mr Peters returns to the UK on 20 September 2019. He is not entitled to split year treatment for 2019-20. He ceased to be Treaty resident in Spain from 1 January 2020.

Mr Peters is UK resident for the 2019-20 tax year.

His residence period is 6 April 2019 to 5 April 2020.

Mr Peters does not have sole UK residence for the residence period because of his Treaty residence in Spain.

His next period of sole UK residence would be the year 6 April 2020 to 5 April 2021.

2020-21 would be regarded as his period of return.

Assuming the other conditions of s10A are met his period of temporary non-residence for the purposes of s10A would end on 5 April 2020.

As can be seen from this example it is possible that an individual could resume residence in the UK for a year and be chargeable in the normal way on gains arising in that year, but he is not chargeable under s10A on gains arising in the period of temporary non-residence until the year after he returns to the UK because of the impact of Treaty residence in another territory.

Example 2

Mr Singer comes to the UK on 5 February 2020. He is entitled to split year treatment for 2019-20, from 5 February. He had been Treaty resident in Spain up to 1 January 2020.

Mr Singer is UK resident for the 2019-20 tax year.

This year is split into two residence periods. The UK part is 5 February 2020 to 5 April 2020 and the overseas part is 6 April 2019 to 4 February 2020.

Mr Singer has sole UK residence for the residence period 5 February 2020 to 5 April 2020. For the overseas part he does not have sole UK residence. The Treaty residence in Spain has no impact on this point.

His period of sole UK residence would be the UK part of the split year i.e. 5 February 2020 to 5 April 2020. This would be the period of return.

Assuming the other conditions of S10A are met, his period of temporary non-residence for the purposes of s10A would end on 4 February 2020.

Example 3

Mr Criss returns to the UK in 2019-20. He is entitled to split year treatment for 2019-20, from 2 December 2019. He had been Treaty resident in Spain to 1 January 2020.

Mr Criss is UK resident for the 2019-20 tax year.

His tax year is split into two residence periods. The UK part is 2 December 2019 to 5 April 2020 and the overseas part is 6 April 2019 to 1 December 2019.

Mr Criss does not have sole UK residence for the residence period 2 December 2019 to 5 April 2020.

His next period of sole UK residence would be the 2020-21 tax year i.e. 6 April 2020 to 5 April 2021.

2020-21 would be regarded as his period of return.

Assuming the other conditions of s10A are met, his period of temporary non-residence would end on 5 April 2020.