Residential status is key to CGT liability

capital gains tax

When advising clients returning to the UK from a period spent living abroad, determining their residential status is paramount before any accurate assessment of their liability for capital gains tax can be made

The key factor in determining if a person is subject to UK capital gains tax (CGT) is their residential status. The Taxation of Chargeable Gains Act 1992 (TCGA 1992) states that a person will be "chargeable to capital gains tax in respect of chargeable gains accruing to him in a year of assessment during any part of which he is resident in the United Kingdom, or during which he is ordinarily resident in the United Kingdom". We will consider here gains accruing and not necessarily gains realised unless so specified. This is an important point when it comes to planning for returning expatria...