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Where Taxpayers and Advisers Meet

UK tax on shares sold after leaving the UK

anders35
Posts:8
Joined:Tue Sep 25, 2018 7:24 pm
UK tax on shares sold after leaving the UK

Postby anders35 » Mon Sep 21, 2020 12:49 pm

Hi,

I am likely going to leave the UK halfway through the tax year 21/22 to start full time employment in a different country. I have some CGT gains on shares which I am planning to realise after leaving the UK. I need to be 100% sure that UK will not want to tax me on these sales (I will not return within five years). After reading on the HMRC web site it sounded like I wouldn't have to worry about any UK tax, but the double tax treaty made me wonder... See below:

HMRC web site:

If you’re abroad
You do not pay Capital Gains Tax on other UK assets, for example shares in UK companies, unless you return to the UK within 5 years of leaving.

However, the double tax treaty with this country says the following:

6. Notwithstanding the provisions of paragraph 5, gains from the alienation of
shares or other rights in a company, or of interests in a partnership or trust derived
by an individual who has been a resident of a Contracting State and who has
become a resident of the other Contracting State, may be taxed in the first mentioned State if the alienation of the property occurs at any time during the
seven years next following the date on which the individual has ceased to be a
resident of the first-mentioned State. The gain so taxed shall not include the gain, if
any, that accrues during the period during which the individual is or was a resident
of the other Contracting State.

Can someone please clarify if there is any way HMRC can tax me on these sales?

Many thanks.

darthblingbling
Posts:698
Joined:Wed Aug 02, 2017 9:09 pm

Re: UK tax on shares sold after leaving the UK

Postby darthblingbling » Mon Sep 21, 2020 1:04 pm

I think that specific provision is put in so the UK can tax under the temporary non res rules. Otherwise the temporary non res rules would be overridden by the tax treaties in place.

maths
Posts:8507
Joined:Wed Aug 06, 2008 3:25 pm

Re: UK tax on shares sold after leaving the UK

Postby maths » Mon Sep 21, 2020 6:20 pm

As darthblingbling states provisions in the UK DTAs along the lines of the provision you quote are designed to preclude the DTA overriding the UK temporary non-residence provision ie the latter remain in force.

zom
Posts:12
Joined:Wed Aug 06, 2008 4:00 pm

Re: UK tax on shares sold after leaving the UK

Postby zom » Mon Sep 28, 2020 9:24 am

When does the 5 years begin? The day leaving the UK or the day beginning work in the new country? Thanks

maths
Posts:8507
Joined:Wed Aug 06, 2008 3:25 pm

Re: UK tax on shares sold after leaving the UK

Postby maths » Mon Sep 28, 2020 7:25 pm

It's necessary to apply Sch 45 FA 2013.

Having said that, it's likely that the first day of the temporary non-residence will be the first day of commencing the overseas work.


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