Taxation of Chargeable Gains Act 1992 Schedule 1 paragraph 2

Use of allowable losses against foreign gains remitted in a later year

Schedule 1 paragraph 2 restricts the use of allowable losses against foreign chargeable gains where those gains are treated as accruing in a tax year later than the year in which they actually arose, typically because they were remitted to the UK in that later year.

• Where foreign gains are treated as accruing in a later tax year (usually due to remittance), special loss restriction rules apply.
• The restriction applies where a section 16ZA election (allowing foreign losses to be treated as allowable losses) is in force for both the year of actual accrual and the year of deemed accrual.
• No allowable losses — whether arising from UK or foreign asset disposals — may be set against those remitted gains under section 1.
• However, any prior reduction of those gains under the matching rules in paragraph 3(3) of Schedule 1 is preserved and unaffected by this restriction.