Schedule D1 | Relief for new residents on foreign gains ^F1

(1)An individual may make a claim for relief for a tax year under this paragraph (a “foreign gain claim”) if the individual is a qualifying new resident for that tax year.^F1

(2)Paragraphs 2, 3 and 4 set out the reliefs that may be obtained by making a foreign gain claim.^F1

(3)A foreign gain claim must be made in a return.^F1

(4)A foreign gain claim in relation to a tax year must be made before the end of the period of 12 months beginning with 31 January after the end of that tax year.^F1

(5)A foreign gain claim may not be made as a consequential claim (within the meaning of section 43C(5) of the Management Act) if the circumstances which give rise to the consequential claim result from a loss of tax brought about carelessly or deliberately by the individual or a person acting on the individual’s behalf.^F1

(6)For the purposes of this paragraph—^F1

(a)“return” means a return under section 8 of the Management Act (personal return),^F1

(b)references to a claim being included in a return include a claim being so included as a result of an amendment of the return, and^F1

(c)subsections (5) to (7) of section 118 of the Management Act (loss of tax brought about carelessly or deliberately) apply as they apply for the purposes of that Act.^F1

(1)Where an individual makes a foreign gain claim for a tax year, the individual is entitled to relief for each qualifying foreign gain accruing to the individual in that year that is identified in the claim.^F1

(2)The relief is given by deducting an amount equal to the sum of those gains from the total amount of qualifying foreign gains accruing to the individual in that tax year.^F1F2F3

(1)This paragraph applies if—^F1

(a)an amount of chargeable gains would (but for this paragraph) be treated as accruing to an individual in a tax year under section 86(4) (attribution of gains to settlors of non-resident settlements),^F1

(b)a qualifying foreign gain accrued in that tax year to the trustees of the settlement concerned (or would have done on the assumption in section 86(3)), and^F1

(c)the individual identifies the gain mentioned in paragraph (b) in a foreign gain claim for that tax year.^F1

(2)For the purposes of section 86(1)(e) as it applies to the individual, the following are to be disregarded (in that tax year and in later tax years)—^F1

(a)the gain mentioned in sub-paragraph (1)(b);^F1

(b)any qualifying foreign loss that accrued to the trustees in that tax year (or that would have so accrued on the assumption in section 86(3)).^F1

(1)This paragraph applies if—^F1

(a)a settlement is for a tax year—^F1

(i)one to which section 87 or 89(2) applies (attribution of gains to beneficiaries of settlements), or^F1

(ii)a relevant settlement in relation to a Schedule 4C pool, within the meaning of paragraph 8A of Schedule 4C (transfers of value: attribution of gains etc),^F1

(b)a beneficiary of the settlement receives a capital payment from the trustees in that tax year, and^F1

(c)the individual identifies the capital payment in a foreign gain claim for that tax year.^F1

(2)The capital payment is to be disregarded (in that tax year and in later tax years) for the purposes of sections 87, 87A and 89(2) and paragraph 8 of Schedule 4C.^F1

(3)The following apply for the purposes of this paragraph as they apply for the purposes of section 87—^F1

(a)section 87G (which provides for capital payments made to a close member of the settlor’s family to be treated in certain cases as received by the settlor);^F1

(b)section 97 (which makes provision about the construction of “capital payment”, “settlement”, “trustees” and “beneficiary”).^F1

(5)For other effects of making a foreign gain claim, see—section 1K(6)(b) (annual exempt amount), which provides that where a foreign gain claim has effect in relation to an individual for a tax year, the individual has no entitlement to an annual exempt amount for that year,section 16(4) (computation of losses), which provides that where a foreign gain claim has effect in relation to an individual for a tax year, qualifying foreign losses accruing to the individual in that year are not allowable losses, andsections 845C to 845E of ITTOIA 2005, which set out some income tax consequences of making a foreign gain claim.^F1

(6)In this Schedule—^F1F4F5F6

“qualifying foreign asset” means an asset that—

is situated outside the United Kingdom, and

does not derive at least 75% of its value from UK land (see Schedule 1A);

“qualifying foreign gain” means—but a chargeable gain falling within paragraph (a) or (b) is not a qualifying foreign gain if it is a gain to which paragraph 1(2) of Schedule 1 applies (pre-2025-26 gains subject to the remittance basis);

a chargeable gain accruing on the disposal of a qualifying foreign asset,

a chargeable gain treated as accruing as a result of section 3 (gains of non-UK resident close companies attributed to UK residents) where the gain accruing to the non-UK resident close company to which the deemed gain relates accrued on the disposal of a qualifying foreign asset, or

a qualifying QAHC gain,

“qualifying foreign loss” means a loss accruing on the disposal of an asset that is a qualifying foreign asset;

“qualifying QAHC gain” means the foreign proportion (see paragraph 46(4) to (6) of Schedule 2 to FA 2022) of a chargeable gain accruing to an individual who provided investment management services in connection with investment arrangements to which a QAHC is party on the disposal of shares in the QAHC that were acquired during the course of the provision of those services;

“QAHC” and “investment management services” have the meanings they have in that Schedule.