CG26400 | Individuals: Effects of residence, ordinary residence and domicile: Relief for New Residents on Foreign Gains (from 6 April 2025)

Background

The Finance Act 2025 s39 Schedule D1 Section 1A(2)(za) sets out the rules effective from 6 April 2025 concerning relief for new residents on foreign gains.

Eligibility for relief

Individuals who are eligible to make a claim for relief must be a qualifying new resident for the tax year. They must have been non-UK resident for a period of 10 consecutive tax years prior to the first tax year they take up UK residency. Qualifying Individuals will be able to make claims under this relief for a maximum of four consecutive tax years.

Example:

Mr A has been non UK resident for a period of 10 consecutive tax years. He becomes UK resident in the 2025/26 Tax Year.

Mr A will be eligible to claim relief on any foreign gains he has for the 2025/26, 2026/27, 2027/28 and 2028/29 tax years.

Claiming relief

Claims made under this relief must be made in the Self-Assessment Tax Return by 12 months from 31 January after the end of the relevant tax year.

Example:

Mr A makes a claim for relief in the 2025/26 Tax Year. The gains for which relief is being claimed must be clearly quantified and reported to HM Revenue and Customs by 31 January 2028.

Qualifying Foreign Gains

Qualifying foreign gains must fulfil the following conditions:

• Be situated outside the United Kingdom.

• Does not derive at least 75% of its value from land in the United Kingdom.

• Arises as a result of a disposal of a qualifying foreign asset.

Relief will be applied directly to the total amount of Qualifying Foreign Gains.

Where relief is claimed it will directly impact the following:

• The Individual will not be entitled to the Capital Gains Annual Exempt Amount.

• Foreign losses cannot be claimed in the respective Tax year.