Taxation of Chargeable Gains Act 1992

[F1 10A Temporary non-residents. U.K.

(1) This section applies in the case of any individual (“the taxpayer") if—

(a) he satisfies the residence requirements for any year of assessment (“the year of return");

(b) he did not satisfy those requirements for one or more years of assessment immediately preceding the year of return but there are years of assessment before that year for which he did satisfy those requirements;

(c) there are fewer than five years of assessment falling between the year of departure and the year of return; and

(d) four out of the seven years of assessment immediately preceding the year of departure are also years of assessment for each of which he satisfied those requirements.

(2) Subject to the following provisions of this section and section 86A, the taxpayer shall be chargeable to capital gains tax as if—

(a) all the chargeable gains and losses which (apart from this subsection) would have accrued to him in an intervening year,

(b) all the chargeable gains which under section 13 or 86 would be treated as having accrued to him in an intervening year if he had been resident in the United Kingdom throughout that intervening year, and

(c) any losses which by virtue of section 13(8) would have been allowable in his case in any intervening year if he had been resident in the United Kingdom throughout that intervening year,

were gains or, as the case may be, losses accruing to the taxpayer in the year of return.

(3) Subject to subsection (4) below, the gains and losses which by virtue of subsection (2) above are to be treated as accruing to the taxpayer in the year of return shall not include any gain or loss accruing on the disposal by the taxpayer of any asset if—

(a) that asset was acquired by the taxpayer at a time in the year of departure or any intervening year when

[F2 (i) he was neither resident nor ordinarily resident in the United Kingdom, or

(ii) he was resident or ordinarily resident in the United Kingdom but was Treaty non-resident;]

(b) that asset was so acquired otherwise than by means of a relevant disposal which by virtue of section 58, 73 or 258(4) is treated as having been a disposal on which neither a gain nor a loss accrued;

(c) that asset is not an interest created by or arising under a settlement; and

(d) the amount or value of the consideration for the acquisition of that asset by the taxpayer does not fall, by reference to any relevant disposal, to be treated as reduced under section 23(4)(b) or (5)(b), 152(1)(b)[F3 , 153(1)(b)], 162(3)(b) or 247(2)(b) or (3)(b).

(4) Where—

(a) any chargeable gain that has accrued or would have accrued on the disposal of any asset (“the first asset”) is a gain falling (apart from this section) to be treated by virtue of section 116(10) or (11), 134 or 154(2) or (4) as accruing on the disposal of the whole or any part of another asset, and

(b) the other asset is an asset falling within paragraphs (a) to (d) of subsection (3) above but the first asset is not,

subsection (3) above shall not exclude that gain from the gains which by virtue of subsection (2) above are to be treated as accruing to the taxpayer in the year of return.

(5) The gains and losses which by virtue of subsection (2) above are to be treated as accruing to the taxpayer in the year of return shall not include any chargeable gain or allowable loss accruing to the taxpayer in an intervening year which, in the taxpayer’s case, has fallen to be brought into account for that year by virtue of section 10 or 16(3).

(6) The reference in subsection (2)(c) above to losses allowable in an individual’s case in an intervening year is a reference to only so much of the aggregate of the losses that would have been available in accordance with subsection (8) of section 13 for reducing gains accruing by virtue of that section to that individual in that year as does not exceed the amount of the gains that would have accrued to him in that year if it had been a year throughout which he was resident in the United Kingdom.

(7) Where this section applies in the case of any individual, nothing in any enactment imposing any limit on the time within which an assessment to capital gains tax may be made shall prevent any such assessment for the year of departure from being made in the taxpayer’s case at any time before the end of two years after the 31st January next following the year of return.

(8) In this section—

• “intervening year” means any year of assessment which, in a case where the conditions in paragraphs (a) to (d) of subsection (1) above are satisfied, falls between the year of departure and the year of return;

• “relevant disposal”, means a disposal of an asset acquired by the person making the disposal at a time when that person was resident or ordinarily resident in the United Kingdom [F4 and was not Treaty non-resident]; and

• “the year of departure” means the last year of assessment before the year of return for which the taxpayer satisfied the residence requirements.

[F5 (9) For the purposes of this section an individual satisfies the residence requirements for a year of assessment—

(a) if, during any part of that year of assessment, he is resident in the United Kingdom and not Treaty non-resident, or

(b) if he is ordinarily resident in the United Kingdom during that year of assessment, unless he is Treaty non-resident during that year of assessment.

[F6 (9ZA) If—

(a) section 809B, 809D or 809E of ITA 2007 (remittance basis) applies to the taxpayer for the year of return, and

(b) the taxpayer is not domiciled in the United Kingdom in that year,

any foreign chargeable gains falling within subsection (2)(a) which were remitted in an intervening year are treated as remitted in the year of return.

For this purpose “foreign chargeable gains” has the meaning given by section 12(4).]

F7 (9A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(9B) Where this section applies in the case of any individual in circumstances in which one or more intervening years would, but for his being Treaty non-resident during some or all of that year or those years, not be an intervening year, this section shall have effect in the taxpayer's case—

(a) as if subsection (2)(a) above did not apply in the case of any amount treated by virtue of section 87 or 89(2) as an amount of chargeable gains accruing to the taxpayer in any such intervening year, and

(b) as if any such intervening year were not an intervening year for the purposes of subsections (2)(b) and (c) and (6) above.]

[F8 (9C) Nothing in any double taxation relief arrangements shall be read as preventing the taxpayer from being chargeable to capital gains tax in respect of any of the chargeable gains treated by virtue of subsection (2)(a) above as accruing to the taxpayer in the year of return (or as preventing a charge to that tax from arising as a result).]

F9 (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ]

Textual Amendments

F1 S. 10A inserted (with effect in accordance with s. 127(4) of the amending Act) by Finance Act 1998 (c. 36), s. 127(1)

F2 Words in s. 10A(3)(a) substituted (with effect in accordance with s. 32(7) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), s. 32(2)(a)

F3 Word in s. 10A(3)(d) inserted (with effect in accordance with s. 32(8) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), s. 32(2)(b)

F4 Words in s. 10A(8) inserted (with effect in accordance with s. 32(9) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), s. 32(3)

F5 S. 10A(9)(9A)(9B) substituted for s. 10A(9) (with effect in accordance with s. 32(7) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), s. 32(4)

F6 S. 10A(9ZA) inserted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 59 (with Sch. 7 para. 84(1)(3))

F7 S. 10A(9A) repealed (with effect in accordance with s. 74(6) of the amending Act) by Finance Act 2006 (c. 25), s. 74(4)(a), Sch. 26 Pt. 3(11)

F8 S. 10A(9C) inserted (with effect in accordance with s. 32(7) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), s. 32(5)

F9 S. 10A(10) repealed (with effect in accordance with s. 32(7) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), s. 32(6), Sch. 11 Pt. 2(4)

Modifications etc. (not altering text)

C1 S. 10A applied (with modifications) (with effect in accordance with art. 1(2)(3), Sch. 1 of the amending S.I.) by The Offshore Funds (Tax) Regulations 2009 (S.I. 2009/3001), regs. 1(1), 23

C2 S. 10A applied (with modifications) by The Authorised Investment Funds (Tax) Regulations 2006 (S.I. 2006/964), reg. 85P (as inserted (with effect in accordance with reg. 1(2) of the amending S.I.) by S.I. 2010/294, regs. 1(1), 21)