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Share loss relief


We have an individual who is a non UK resident with substantial UK Income. He has lost money on a share investment, which otherwise comes within part 4, chapter 6 ITA 2007. However, that relief is granted to individuals who "incur an allowable loss for capital gains tax purposes" and section 131(3) states that the relief applies only if the disposal of the shares is...(c) A disposal within section 24(1) of TCGA.

Bearing in mind that this indivdidual is not a UK resident and the disposal is of a an investment, which would not come within the charge of CGT unless he came back to the UK within 5 years, presumably there is no loss for CGT purposes and therefore the income tax relief cannot be claimed?

Thanks in advance


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06th Dec 2012 12:16

Correct I think

At the moment CGT applies to persons resident and/or ordinarily resident the UK.  From next April if the statutory residence test is enacted as currently intended the concept of ordinary residence will disappear.

If the client is neither resident nor ordinarily resident, and does not return within 5 years, then the transaction is outside the scope of CGT in the first place, preventing a claim to turn the loss into an income loss.

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