IFM37310 - Foreign Chargeable Gains: Introduction

Foreign chargeable gains

Introduction

TCGA92/S103KC

Foreign chargeable gains are outlined in TCGA92/S103KC. Where an individual performs relevant investment management services outside the UK, the chargeable gain which accrues under TCGA92/S103KA(2) or (3) will be classed as a foreign chargeable gain irrespective of the location of the investment scheme assets. Foreign chargeable gains may be taxed on the remittance basis if a valid election is made (TCGA92/Sch 1).

These rules do not displace the general rule of TCGA92/S1A that non-residents will not be charged to capital gains tax other than in respect of certain direct and indirect disposals of UK land (see CG73920) and the disposal of assets used in a trade carried out in the UK through a branch or agency.

Typically, foreign chargeable gains are defined as chargeable gains accruing from the disposal of an asset located outside the UK (TCGA92/Sch 1).

Carried interest does not follow this normal rule and instead a foreign chargeable gain is a chargeable gain accruing on the disposal of an asset situated outside the UK to the extent that the individual performs investment management services outside the UK.