Income Tax Act 2007 section 809YD

Chargeable gains accruing on sales of exempt property

Section 809YD deals with how chargeable gains arising from the sale of exempt property in the UK are treated for remittance basis purposes, effectively re-characterising such gains as foreign chargeable gains.

• When exempt property is sold at a gain in the UK, the gain is treated as a foreign chargeable gain for remittance basis purposes, meaning it is only taxed if and when it is remitted to the UK.
• The foreign chargeable gains already deemed to be contained in the sale proceeds are increased by the amount of the gain arising on the sale, ensuring the mixed fund rules properly track the new gain alongside the original foreign income or gains used to acquire the property.
• No action taken in relation to the sale proceeds before they are taken offshore or used to make a qualifying investment counts as a remittance of the gain to the UK, giving the individual time to move the proceeds without triggering a tax charge.
• The individual may opt out of this treatment by giving written notice to HMRC identifying the gain, provided the notice is submitted no later than one year after the 31 January following the tax year in which the gain arises, and once that deadline passes the notice cannot be revoked.