CG25300 - Effect of residence and domicile
Source: gov.uk (2025-06-25)


Changes from 6 April 2025

The concept of domicile as a relevant connecting factor in the tax system has been replaced by a system based on tax residence.

The latest guidance can be found in RFIG (https://www.gov.uk/hmrc-internal-manuals/residence-and-fig-regime-manual) for Residence and RDRM (https://www.gov.uk/hmrc-internal-manuals/residence-domicile-and-remittance-basis) for Domicile manuals.

Please note that cases which occur from 6 April 2025 onwards will be determined in accordance with the new rules.

Becoming resident

An individual who becomes resident (or in years to 2012/13 ordinarily resident) in the UK for the first time and who realised gains on assets located outside the UK before he or she became resident in the UK, may remit those gains to the UK after that individual has become resident.

Those gains are not chargeable. In a case where the remittance basis is claimed for the year the individual first becomes resident they would not be caught by the remittance basis because it would not have applied in the year the gains accrued. TCGA92/S12* cannot apply to them.

Domiciled in the UK

If an individual within the charge to Capital Gains Tax, see CG25200P (https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg25200p), is domiciled in the UK, he or she is liable in respect of gains arising from assets situated anywhere in the world.

If the individual is not domiciled in the UK, he or she is still liable in respect of gains arising from assets situated in the UK, but liability in respect of gains on assets situated outside the UK will depend on whether the remittance basis applies.

Where the remittance basis applies (see CG25300P (https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg25300p)+) the individual is not charged to tax when the foreign chargeable gains accrue, but when they are remitted to the UK. There are extensive rules for determining when gains are remitted, and the same rules apply to foreign income. For detailed guidance on these rules, see the Residence, Domicile & Remittances Manual.

In order to decide where an asset is situated, see CG12400 (https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg12400).

Deemed domiciled in the UK (2017/18 onwards)

For 2017/18, and subsequent years, an individual may be deemed domiciled in the UK. Deemed domicile status for a year does not change an individual’s actual domicile status but in broad terms means that they are treated they as if they were actually UK domiciled in the UK for the year.

The deemed domicile rules are in s835BA ITA 2007 and guidance is within the Residence, Domicile and Remittance Basis Manual. As a brief overview, an individual is deemed domiciled if they meet either condition A or condition B:

Condition A applies where the individual:

was born in the UK

was born with a UK domicile of origin and

is resident in the UK (for 2017/18 or later years)

It follows that if an individual is resident in the UK and condition A applies then it is not possible to lose deemed domicile status for any later year in which they are resident.

Condition B is that the individual has been UK resident for at least 15 of the 20 tax years immediately preceding the relevant tax year.

A specific consequence of becoming deemed domiciled is that remittance basis cannot be claimed.

There is a limited exception to the above for capital gains if an individual left the UK before 17 August 2015 and the temporary non residence provisions apply see CG26287 (https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg26287) and CG26665 (https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg26665).

Becoming domiciled or deemed domiciled

An individual who is resident (or for years to 2012/13 ordinarily resident) but who has not been domiciled in the UK may change his or her domicile status and become domiciled in the UK.

An individual may become deemed domiciled for 2017/18 or a later year.

A change in domicile status does not affect the treatment of gains arising in an earlier year for which the remittance basis may have been claimed.

*This provision was re-written for disposal from 6 April 2019 see CG10150 (https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg10150).