CG26540 - Arrival in and departure from UK: temporary non-residence: meaning of terms - year of departure 2013-14 or later

Period A - This is the last residence period for which the individual had sole UK residence, immediately preceding a residence period for which the individual does not have sole UK residence.

Period of return - This is the first residence period after period A for which the individual has sole UK residence.

Resident - The term resident referred to in TCGA92/S10A* and elsewhere in the TCGA for 2013-14 and later years, is defined for Capital Gains Tax purposes in accordance the Statutory Residence Test.

Residence period - This is a tax year which is not a split year, or if it is a split year the overseas part or the UK part of that split year.

Sole UK residence - A person has sole UK residence for a residence period that consists of an entire tax year provided there is no time in that year when the individual is Treaty non resident. A person also has sole UK residence for the UK part of a split year provided there is no time in that part of the year when the person is Treaty non resident.

Split-year - A split year is a tax year that can be split under the Statutory Residence Test rules into a UK part of a split year and an overseas part of a split year.

Temporarily non-resident - This applies to an individual who:

  1. has sole UK residence for a residence period
  2. immediately following that period, one or more residence periods for which he/she does not have sole UK residence

  3. For at least 4 out of the 7 tax years immediately preceding the year of departure, the relevant year for the individual was either:

    1. a tax year of sole UK residence
  5. a split year that included a residence period for which he/she had sole UK residence and

the period of temporary non-residence is 5 years or less.

For the purpose of the 4 out of 7 year test, where a year falling within the 7 year period is 2012-13 or an earlier year then the test is modified slightly. A year would be regarded as one of the 4 years where:

  1. the individual was resident in the UK for the year and
  2. there was no time in that year when the individual was treaty non-resident.

Period of temporary non-residence - This is the period between the end of period A and the start of the next residence period after period A for which the individual has sole UK residence.

Treaty non resident - An individual is treaty non resident if at that time the person falls to be regarded as resident in a country outside the UK for the purposes of the Double Taxation arrangements having effect at that time.

Year of departure - This is the tax year consisting of or including Period A.

Additional guidance on these terms can be found within the RDR3 Guidance Note: Statutory Residence Test (SRT).

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