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2013 Finance Bill change?

2013 Finance Bill change?


Is it me or does the 2013 Finance Bill change the 5 year non residence requirement for CGT?

Looking at the Finance Bill it states that the temporary non residence provisions apply "if the period of temporary non residence
is 5 years or less."

Before 6 April 2013 you could avoid the temporary non resident provisions by remaining abroad for at least 5 complete tax years.

This would indicate to me that you have to be non resident for 6 years where you leave after 5 April 2013 - or have I missed something?




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09th Feb 2013 09:35

You are quite correct, and it is noted as a change in the Finance Bill notes


I quote

"The provisions in this Part apply if the period of temporary nonresidence is 5 years or less. This is a change from the current temporary non-residence provisions which apply if there are no more than 5 tax years (‘intervening years’) between the year of departure and the year of return."


The consulation document in June mentioned this:-

"The consultation proposed a new anti-avoidance rule to counteract the risk of individuals creating artificial, short periods of non-residence to receive income free of tax when it accrues during a period of residence and would otherwise be liable to UK tax. This would be similar to the existing rule which applies to capital gains which treats gains arising in a temporary period of non-residence as accruing to the taxpayer in the year of return." Mow the CGT rules also were the 5 tax years as you mentioned!!


But the document also goes on to say:-

"The Government confirms that the new rule will be modelled on the existing capital gains rules and will apply where:
• an individual has been resident in four or more of the seven tax years prior to the
tax year in which they become non-resident; and
• becomes resident again within five years of leaving."







Thanks (1)
By ttfg1
09th Feb 2013 17:03

Many thanks for this. I thought I was going crazy as I'd read and reread the finance bill.

It looks as though they've changed their position then from the June consultation document.

Thanks again


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