Taxation of Chargeable Gains Act 1992 section 16ZA

Losses: non-UK domiciled individuals

Section 16ZA provides a mechanism for non-UK domiciled individuals to elect to have their foreign losses treated as allowable losses, subject to certain conditions and restrictions on timing and use.

• Non-UK domiciled individuals can elect to use losses arising on disposals of assets situated outside the UK to offset foreign chargeable gains, but only if they make the election at the right time.
• The election must be made for the first tax year in which the individual claims the remittance basis of taxation, or the first tax year following a period of UK domicile — if this window is missed, foreign losses are permanently unavailable for all years in which the individual is not UK domiciled.
• Once made, the election is irrevocable and applies for the tax year of election and all subsequent years, unless the individual becomes deemed domiciled in the UK, at which point the election ceases to have effect — though a fresh election can be made for a later year if circumstances change.
• The election follows the same procedural rules as a claim for relief under the Taxes Management Act 1970, with the exception of section 42(1A) of that Act.