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CG26506 | Arrival in and departure from UK: importance of establishing the correct ‘year of departure’ 2013-14 or later - overlap between definitions

From HM Revenue & Customs · Capital Gains Manual

As stated in CG26505 there may be occasions where for an individual there is an overlap created by the old and new definitions of ‘year of departure’. This is unlikely to affect many cases but it may occur where the individual:

  • first leaves the UK and the year of departure under the ‘old’ s10A provisions is 2012-13 or an earlier year

  • returns to the UK after a period of temporary non-residence

  • shortly after returning moves out of the UK again for a further period of temporary non-residence.

Where the ‘old’ and ‘new’ provisions overlap the ‘old’ provisions will continue to apply.

Example

Mr P has been resident in the UK for many years. He first leaves the UK for a period of temporary non-residence in 2011-12.

Mr P is not UK resident for 2012-13 and makes gains in that year.

Mr P returns to the UK in 2013-14 and is resident under the SRT rules for the year (but does not have sole UK residence for the year).

Mr P goes abroad again in 2013-14.

Mr P remains overseas for 2014-15 and makes gains in that year.

Mr P returns to the UK in 2015-16 and is resident for the year under the SRT rules (but does not have sole UK residence for the year). Mr P has sole UK residence for 2016-17.

The provisions are applied as follows:

2011-12 will be the year of departure under ‘old’ s10A.

2012-13 is an intervening year under ‘old’ s10A.

2013-14 will be a year of return under ‘old’ s10A and the gains from 2012-13 are chargeable for 2013-14.

2013-14 will also be a year of departure under ‘old’ s10A (in respect of the 2015-16 return).

2014-15 will be an intervening year under ‘old’ s10A.

2015-16 will be a year of return under ‘old’ s10A and the gains from 2014-15 are chargeable for 2015-16.

The ‘new’ s10A* provisions (see CG26510+) do not need to be considered in this example. If they were considered in isolation they would create an overlap with the first period of temporary non-residence and produce incorrect results for the years in which gains would be assessed.

*This provision was re-written for disposals from 6 April 2019 see CG10150.