Capital Gains Tax for individuals not resident in the UK

Updated on 12 November 2017

There are special rules for Capital Gains Tax purposes that apply to individuals who are normally resident in the UK, but are temporarily resident outside the UK. These rules may apply to you if you are posted overseas.

Note that the guidance here does not apply to those who are not domiciled in the UK: they should seek professional advice.

How do I know if I am resident in the UK?

You can read more about residence in the section on ‘Residence and Domicile’. In addition, you can check your residence position using the Statutory Residence Test on GOV.UK.

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When do the special rules apply?

Broadly the rules apply where you were resident in the UK, you left the UK and became non-UK resident and then returned to the UK within 5 years. If these rules apply you are called a ‘temporary non-resident’.

To determine whether you are a temporary non-resident, first you need to establish the tax year in which you left the UK. There are separate rules that deal with your situation depending on whether or not you left the UK:

  • On or after 6 April 2013; OR
  • before 6 April 2013

You left the UK on or after 6 April 2013

The rules will apply to you if:

  • you were solely UK resident at the time of departure from the UK and this was the case for at least four of the seven tax years immediately before you left the UK on this occasion;
  • immediately after that you were not resident in the UK or not solely resident in the UK; and
  • you resume residence in the UK after a period of five years or less.

You left the UK before 6 April 2013

The rules will apply to you if:

  • you were UK resident or ordinarily resident during the tax year of departure and this was the case for four of the seven years immediately before you left the UK on this occasion; and
  • you resume residence in the UK after less than five years.

Before 6 April 2013, there were different rules to determine residence and there was also a concept of ordinary residence. You may need to know your residence position for years before 2013/14 for these purposes and you can read about the rules that applied then in leaflet HMRC6.

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What do the special rules mean?

If you are a temporary non-resident, then in the year of your return to the UK any gains or losses realised during your period of non-residence become chargeable to Capital Gains Tax in the year of return. You may be able to get some relief if you have paid foreign taxes on these gains. Normally no tax charge arises if the asset that was sold during the period of temporary non-residence was acquired during that same period.

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Do these rules also apply to the sale of my home in the UK?

Yes, they can also apply to that. There are complex rules applying to the sale of your home in the UK and you should read the page ‘Capital Gains Tax on the sale of your home’.

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What about tax in the country where I am living?

Each country has its own rules on Capital Gains Tax. If you dispose of any asset while you are living outside the UK, you may have to pay foreign tax on any gain that arises. You will need to take advice locally. Any foreign tax that you pay may be used in whole, or in part, against any liability you have to UK Capital Gains Tax in relation to the same disposal.

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Where can I find further information?

GOV.UK has a service allowing you to send questions about capital gains tax if you are not resident in the UK.

HMRC have produced a Helpsheet to guide you if you think you may be a temporary non-UK resident.

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