RDRM31170 - Remittance Basis: Introduction to the Remittance Basis: Foreign Income and Gains: Foreign chargeable gains
Source: gov.uk (2025-07-31)


Foreign chargeable gains means chargeable gains accruing from the disposal of an asset which is situated outside the United Kingdom - refer to section 12(4) TCGA 1992.

For years up to 5 April 2013 (2012-2013 tax year) only, an individual who was not ordinarily resident in the UK but was UK domiciled and who claimed the remittance basis of taxation, did not qualify to be taxed on the remittance basis in respect of their chargeable gains and was still taxed on the arising basis. They did, however, still lose the Annual Exempt Amount for capital gains purposes as well as their personal allowances if they claimed the remittance basis (Refer to RDRM32040 (https://www.gov.uk/hmrc-internal-manuals/residence-domicile-and-remittance-basis/rdrm32040) Loss of Personal Allowances and the Annual Exempt Amount).

The concept of ordinarily resident and by default not ordinarily resident was made obsolete upon the introduction of the Statutory Residence Test (SRT), from 6 April 2013. Only those individuals who are non-UK domiciled could claim the remittance basis from that date.

Note: The examples in this and later Chapters are designed simply to illustrate the basic principles. The Chapters use the phrase remittance of ‘foreign chargeable gains’, or refer to such gains being ‘remitted’. This phrase is used throughout as convenient shorthand. Foreign chargeable gains will usually be part of the proceeds from the sale of an asset, which will likely be a mixed fund. You will need to refer to this Chapter together with RDRM35000 (https://www.gov.uk/hmrc-internal-manuals/residence-domicile-and-remittance-basis/rdrm35000) in order to identify and quantify remittances of gains out of proceeds.

Foreign losses

With the exception of individuals who used the remittance basis under section 809D or section 809E ITA 2007 without claim (refer to RDRM32100 (https://www.gov.uk/hmrc-internal-manuals/residence-domicile-and-remittance-basis/rdrm32100): Exceptions to the claim requirements), non-domiciled remittance basis users were required to make an election under section 16ZA TCGA 1992 if they want their overseas losses to be offset against foreign chargeable gains.

It is no longer possible to make a loss election for a tax year from 2025-26 onwards as section 16ZA was repealed by the Finance Act 2025. However, where an individual has made an election for a tax year prior to 2025-26, any unused allowable losses at 6 April 2025 can be used after this date.

The election should have been made for the first year for which the remittance basis was claimed, irrespective of whether the individual had any foreign chargeable gains or overseas losses in that year. The election was usually made within the white space in the Capital Gains supplementary pages of the same SA tax return as the first remittance basis claim was made. The election was irrevocable.

The usual time limits for claims and elections at sections 42 and 43 TMA 1970 apply. Refer to the Self Assessment Claims Manual (SACM) for further information about claim time limits.

If an election has been made then, in a tax year in which the remittance basis applied (and the individual is not domiciled in the United Kingdom), special rules applied to determine how gains were to be relieved by losses.

From 6 April 2025, the special rules set out below no longer apply, and allowable losses can be used in whichever way is most beneficial (section 1F TCGA 1992)

Before 6 April 2025, the allowable losses under section 2 TCGA 1992 were matched:
- firstly, against foreign chargeable gains accruing in the tax year to the extent that they are remitted to the United Kingdom in that year
- secondly, against foreign chargeable gains accruing in that year to the extent that they are not so remitted
- thirdly, against chargeable gains accruing in that year other than foreign chargeable gains
You should refer to the Capital Gains Manual (CG25330 (https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg25330)) for full details.

If the individual did not make an election, relief cannot be allowed in respect of any foreign losses accruing to them in that year, or any future tax year in which they remain not domiciled in the United Kingdom (whether or not they claimed or used the remittance basis in those later years).

The introduction of deemed domicile (from 2017-2018) changes

The section 16ZA election remained in force unless the individual acquired an actual UK domicile or became deemed UK domiciled. If the individual was non-UK domiciled the election was in force for tax years in which the individual was chargeable on the arising basis of assessment.

If a previously non-domiciled individual became deemed domiciled in the UK or acquired an actual UK domicile, losses on the disposal of foreign situs assets that arose in the year they became deemed domiciled and in later years were allowable losses under the normal rules. See CG25330 (https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg25330) for more information.

If a deemed domicile individual lost their deemed domicile status (by becoming non-UK resident for at least 6 years for example) and if they returned to the UK and became resident a fresh section 16ZA election needed to be made for the later period. See CG25330A (https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg25330a) for more information.