John, a UK resident, moved to France for three years before returning to the UK. This case study shows how the temporary non-residence rules affect a sale he made while he was away.

John had lived in the UK his whole life. He moved to France on 1st May 2021 and became non-resident. He returned to the UK on 1st May 2024. Before he left the UK, he owned shares worth £200,000.

The Disposal

While living in France in 2022, John sold his shares for £300,000, making a £100,000 gain. As a non-resident, he paid no UK CGT at the time.

The Return to the UK

John returns to the UK within 5 years of leaving. Because he was a UK resident for many years before he left, he meets the conditions for the temporary non-residence rules.

The Tax Consequence

The £100,000 gain he made while he was non-resident is treated as if it arose in the tax year he returned to the UK (2024/25). The gain is now subject to UK Capital Gains Tax in that year. He can, however, claim credit for any tax he may have paid on the gain in France to avoid double taxation.

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