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HMRC internal manual

Capital Gains Manual

Temporary non-residence - the problem - TCGA92/S86


TCGA92/S10A prevents a taxpayer avoiding Capital Gains Tax by leaving the UK, disposing of assets while they are non-resident and then returning to the UK. It applies if a UK resident taxpayer leaves the UK for a period of up to five complete tax years. Gains that accrued to the taxpayer while they were non-resident are treated as accruing in the year they return to the UK. See CG26100 for guidance on TCGA92/S10A.

Section 10A will apply to any TCGA92/S86 gains that accrued in the period of temporary non-residence. That gives rise to a potential double charge if the same gains have also been taxed under TCGA92/S87. This will happen if trustees make capital payments to beneficiaries during the period. The capital payments will be matched to the trustees’ gains. If those gains accrued in the period of temporary non-residence they will be charged again on the settlor when they return.