Taxation of Chargeable Gains Act 1992 section 16ZC

Individual who has made election under section 16ZA and to whom remittance basis applies

Section 16ZC sets out special rules for matching allowable losses against chargeable gains where a non-UK domiciled individual has elected to keep foreign losses as allowable losses and is taxed on the remittance basis in a given tax year.

• Where a section 16ZA election is in force and the remittance basis applies, losses must be matched against gains in a strict order of priority
• Losses are first set against remitted foreign gains, then against unremitted foreign gains, and finally against UK gains
• Only the losses matched against remitted foreign gains and UK gains actually reduce the CGT charge — losses absorbed by unremitted foreign gains provide no effective relief
• The practical effect is that allowable losses used up against unremitted foreign gains cannot shelter UK gains from tax

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