Section 10A of the Taxation of Chargeable Gains Act 1992 is the rule that prevents a short overseas break from being used to shelter gains that would otherwise have been within UK CGT. The mechanism: a returning UK resident whose period of non-residence was 5 years or less has certain gains realised during the non-residence period deemed to arise in the tax year of return. The substituted s.10A introduced by Finance Act 2019 sits on top of the wider non-resident CGT regime in s.1A TCGA 1992 and the Statutory Residence Test in Schedule 45 to Finance Act 2013. The interaction matters for any landlord-emigrant who might return to the UK within 5 years.

The misconception that comes up most often: "If I sell my UK rental flat after I leave, there is no UK CGT." Wrong. Non-resident CGT under s.1A has caught UK residential property disposals by non-residents since 6 April 2015 and UK non-residential and indirect disposals since 6 April 2019. Section 10A is the secondary layer that catches what NRCGT does not catch (non-UK situs assets, the pre-rebasing portion of UK land gains) and only where the non-residence period is short enough for the rule to bite. This page works through the test, the assets it actually catches, the NRCGT interaction, and the planning levers, with three landlord-emigrant scenarios.

The two-pronged test

Two pre-conditions must both apply for s.10A to engage.

Pre-condition 1: prior UK residence. The individual was UK-resident for 4 or more of the 7 tax years immediately before the year of departure. A landlord who arrived in the UK in 2024 and left in 2026 fails this pre-condition (only 2 prior UK-resident years) and is outside s.10A regardless of how short the non-residence period is. This carve-out protects short-term UK arrivers from being caught by the recapture on overseas assets.

Pre-condition 2: short non-residence period. The period of non-residence is 5 years or less. HMRC Capital Gains Manual CG26540 is the canonical reference for the "5 years or less" wording, verified against the statute and HMRC guidance on 2026-05-22. The clock runs from the year of departure (or split-year date where Case 1, 2, or 3 applies) to the year of return. To be outside the rule the period of non-residence must exceed 5 years; in practice this means being non-resident for at least the whole of the sixth tax year as well, with the return falling no earlier than 6 April of the seventh tax year after departure.

Both pre-conditions must hold. A landlord who lived in the UK for 30 years (pre-condition 1 satisfied) and was non-resident for 4 tax years before returning (pre-condition 2 satisfied) is caught. A landlord who lived in the UK for 30 years and was non-resident for 7 tax years before returning satisfies pre-condition 1 but not pre-condition 2 and is outside the rule.

What is actually caught by section 10A

The deeming rule applies to gains realised during the non-residence period on assets owned at the date of departure. Three categories matter for property investors.

Non-UK situs assets owned at departure

Overseas property, foreign equity holdings, foreign collective investment scheme units, foreign bank account balances generating capital gains (rare but possible), and offshore portfolio bonds. A landlord who held US ETFs at departure and sold them in year 3 of non-residence has the gain deemed to arise in the return year and taxed at UK CGT rates. Foreign tax paid on the disposal at the time may be credited against the deemed UK liability under TIOPA 2010 unilateral relief or under the relevant double tax treaty.

UK land owned at departure, the pre-rebasing portion only

This is the property-specific case. UK residential property disposals by non-residents are caught by NRCGT regardless of s.10A, but rebasing to 5 April 2015 market value (the default for residential land owned before that date) means the portion of the historic gain accruing before 5 April 2015 is OUTSIDE NRCGT. Section 10A picks up that pre-2015 portion if the landlord returns within 5 years.

The same logic applies to UK non-residential land owned before 5 April 2019 (rebasing to that date is the default for the non-residential extension brought in by Finance Act 2019). Pre-2019 gains on non-residential land are outside NRCGT but inside s.10A if the seller returns within 5 years.

The numerical effect is significant. A long-held UK residential rental flat with a historic 1995 base cost of £90,000, an April 2015 rebased value of £240,000, and a 2027 sale price of £360,000 produces an NRCGT gain of £120,000 (the post-2015 portion) and an s.10A-recoverable gain of £150,000 (the pre-2015 portion). On a return within 5 years the landlord pays NRCGT on £120,000 at the time of sale plus s.10A on £150,000 in the return year.

Offshore trusts and life policies

Specific anti-avoidance provisions catch capital payments from offshore trusts and gains on life insurance policies acquired before departure. These rarely apply to standard landlord-emigrant cases but matter for high-net-worth landlords with trust structures.

What is NOT caught by section 10A

The carve-outs are as important as the inclusions.

Assets acquired AND disposed of entirely during the non-residence period. The legislation requires the asset to have been held at departure. A Dubai apartment bought during overseas residence and sold before return is outside s.10A. So is a US share holding acquired and liquidated during the same overseas period.

Gains realised while UK-resident. Section 10A deems gains from the non-residence period to arise in the return year, but a gain realised in the year of return when the individual is already UK-resident (or in any UK-resident year) is taxed under ordinary CGT, not under s.10A. The deeming layer applies only to non-residence-period disposals.

NRCGT gains on UK land already taxed. Where the NRCGT regime has already caught the full gain (typically post-2015 residential or post-2019 non-residential, with no pre-rebasing portion because the asset was acquired post-rebasing-date), s.10A does not add a second layer. The NRCGT charge is the only charge.

Disposals more than 5 years after departure. Even of assets held at departure. If the non-residence period exceeds 5 years before the return, s.10A does not engage at all.

Interaction with non-resident CGT on UK land

The two regimes coexist and can both apply to the same disposal. The structural logic:

  • UK land, any disposal by a non-resident: NRCGT applies regardless of how long the non-residence lasts. 60-day reporting required on every disposal, tax due or not. Rates align with UK-resident rates.
  • UK land, pre-rebasing portion not caught by NRCGT, return within 5 years: s.10A picks up the pre-2015 (residential) or pre-2019 (non-residential) historic gain in the return year.
  • Non-UK situs assets, return within 5 years, asset held at departure: s.10A only. NRCGT does not apply (NRCGT is a UK land regime).
  • Non-UK situs assets, return after 5 years: Outside both regimes for UK CGT purposes (foreign country taxation depends on its own rules).

The companion non-resident CGT rates and reporting page sets out the NRCGT mechanics in detail; the non-resident CGT when selling UK property page handles the operational steps for the UK land disposal itself.

Three landlord-emigrant scenarios

Olivia: contracted overseas, returns in year 4

Olivia, a single landlord with one UK rental flat and a US ETF portfolio worth $180,000 at departure, accepts a Singapore consultancy contract in 2026. She qualifies for Case 1 split-year from 1 September 2026, is non-resident for 2027/28, 2028/29, 2029/30, and returns to the UK on 1 July 2030 (split-year Case 6 arrival from 1 July 2030). Total non-residence: 4 tax years (2027/28 to 2030/31 with the partial UK-part start in July 2030).

Pre-condition 1: she was UK-resident for at least 4 of the 7 prior tax years (yes, she had lived in the UK throughout). Pre-condition 2: non-residence period is 4 years, less than 5. Both apply; s.10A engages.

During non-residence she sold $120,000 of her US ETFs in 2028/29 (held at departure), realising a sterling gain of £38,000. She also sold her UK rental flat in 2029/30 for £310,000 against a 2018 base cost of £240,000 (no rebasing relief because acquired post-2015). The UK rental flat triggered NRCGT in 2029/30 at the time of disposal: gain £70,000, NRCGT £14,720 (assuming higher-rate slice of £67,000 at 24% plus AEA of £3,000 used). 60-day return filed.

On her 2030/31 SA return she reports the s.10A deemed accrual: the £38,000 US ETF gain (the only s.10A item; the UK flat was acquired post-2015 so no pre-rebasing portion exists). The deemed gain falls into the higher-rate slice in her return year and is taxed at 24% (it is a non-residential gain for the recapture computation, with the same 18%/24% scheme applying to both residential and non-residential since 30 October 2024). Tax: roughly £9,120 minus the foreign tax credit for US capital gains tax paid at the time. Reported on SA108.

Tariq: pre-2015 UK property holding, returns in year 3

Tariq owns a Manchester flat bought in 2005 for £110,000. The April 2015 rebased value was £240,000. He emigrates to Dubai in 2026 (Case 1 from 1 October 2026), is non-resident for 2027/28 and 2028/29, returns in 2029/30 (Case 6 arrival from 1 March 2030). Non-residence period: 3 tax years and a bit. Pre-condition 2 satisfied.

He sells the Manchester flat as a non-resident in 2028/29 for £380,000. NRCGT gain (post-2015 portion): £380,000 minus £240,000 = £140,000. NRCGT at the time: roughly £33,600 (assuming higher-rate slice) plus AEA of £3,000. 60-day return filed within 60 days of completion.

On his 2029/30 SA return he reports the s.10A deemed accrual for the pre-2015 portion: £240,000 minus £110,000 = £130,000. The pre-2015 portion is outside NRCGT but inside s.10A because Tariq returns within 5 years. The deemed gain is taxed at 24% (residential) in 2029/30 minus AEA already used. Tax: roughly £31,200. The two layers combined produce a total UK CGT charge of about £64,800 on a flat that would have been NRCGT-only at £33,600 had Tariq stayed non-resident beyond 5 years.

The Lawrences: 6 full tax years out before returning

The Lawrence family emigrate to Australia in 2026 (Case 1 from 1 August 2026), are non-resident for 2027/28, 2028/29, 2029/30, 2030/31, 2031/32, and 2032/33. They return on 7 April 2033 (split-year Case 6 from that date). Non-residence period: 6 full tax years and a bit. Pre-condition 2 fails (non-residence is more than 5 years); s.10A does not engage at all.

They sold their UK rental flat in 2031/32 for £420,000 against a 2010 base cost of £160,000 and April 2015 rebased value of £230,000. NRCGT at the time of disposal: post-2015 portion of £190,000 taxed at residential rates with AEA. The pre-2015 portion of £70,000 is outside NRCGT (rebasing election) and outside s.10A (non-residence over 5 years). Total UK CGT: only the NRCGT layer.

The Lawrences also bought and sold an Australian house entirely during their non-residence period. That gain is outside UK CGT entirely (asset acquired after departure, disposed during non-residence, and even if s.10A applied the asset would be outside the holding-at-departure requirement). Australian CGT on the house is a matter for the ATO under Australian domestic law.

The Lawrences' arithmetic compared to Tariq's shows the planning value of staying out for the sixth tax year: the same UK rental flat producing similar economic gains, with the same buyer-side mechanics, but with the pre-rebasing portion either inside s.10A (Tariq, £31,200 of additional CGT) or outside it (Lawrences, no additional CGT).

Income tax parallel: section 812 ITA 2007

Section 812 of the Income Tax Act 2007 is the income tax counterpart of s.10A. It applies the same 5-years-or-less test to certain types of income received during the non-residence period: dividends from close companies the individual controls, pension lump sums, distributions from offshore trusts, and chargeable event gains on life policies. The income is deemed to arise in the year of return and taxed under ordinary income tax rates.

For property investors the practical implication is narrower than the CGT version: most rental income from UK property is taxed in the UK regardless of residence under s.264 ITTOIA 2005 (and the non-resident landlord scheme manages the withholding), so there is no income that escapes during non-residence and needs recapture on return. Section 812 mainly matters where a landlord with a personal pension takes a lump sum during non-residence and returns within 5 years (the lump sum can be pulled back into the UK tax base on return).

Planning levers for the landlord-emigrant

The lever set is short.

Stay out for more than 5 complete tax years. The cleanest escape. Requires the non-residence period to extend beyond 5 full tax years; in practice this usually means delaying the return until at least the seventh tax year after departure.

Crystallise the gain before leaving. Sell while UK-resident, taking the gain into ordinary CGT for the departure year. The gain is then outside the s.10A window because s.10A only catches gains realised DURING non-residence. The trade-off: pay full UK CGT now versus the risk of recapture later.

Acquire post-departure for asset categories you might want to dispose of. Assets acquired after the departure date are outside the s.10A holding-at-departure requirement. A landlord planning a portfolio rotation during non-residence can structure new acquisitions overseas without triggering the recapture layer on later disposals.

Defer the disposal until after the 5-year window closes. If neither the early sale nor the extended-non-residence options are available, holding the asset until at least the sixth tax year of non-residence (and disposing while still non-resident) avoids s.10A entirely. NRCGT still applies to UK land in this scenario; the deferral only helps for non-UK assets and the pre-rebasing portion of UK land gains.

The 12-month pre-departure checklist sequences the operational steps that sit underneath these levers. Where the s.10A position is material, the sell-or-hold decision belongs at month 9 to 6 of the pre-departure window.

Self-assessment reporting on return

The deemed accrual is reported on the SA108 capital gains pages of the self-assessment return for the year of return. Disclose:

  • Each disposal made during the non-residence period that engages s.10A (asset description, date of disposal, proceeds, allowable cost, gain).
  • The 5-year-or-less basis (departure date, return date, total tax years of non-residence).
  • The 4-of-7-prior-years basis (a brief statement that the pre-condition is satisfied).
  • Any foreign tax paid at the time of disposal, with the foreign tax credit calculation under TIOPA 2010.

The return is filed by 31 January following the year of return. The enquiry window then runs from that filing date; HMRC has 12 months from the filing date to open an enquiry into the return as filed, with the standard discovery extensions for careless or deliberate omissions. Keep contemporary evidence (disposal documentation, base-cost evidence, foreign tax computations) for at least six years from the return year.

The companion descriptive expat property income obligations page hangs s.10A off the broader expat hub; the underlying CGT on selling a rental property guide carries the base-cost and rate mechanics for the disposal computation itself.

Common misconceptions to avoid

"It is 4 years, not 5." Wrong. The test is 5 years or less, with a separate 4-of-7-prior-years pre-condition. The two numbers are different tests; conflating them produces wrong answers.

"Selling UK property as a non-resident avoids CGT." Wrong. NRCGT under s.1A TCGA 1992 catches UK land disposals by non-residents regardless of how long the non-residence lasts. Section 10A is the secondary layer that catches what NRCGT does not.

"Once I have left, gains on assets I bought during non-residence are caught on return." Wrong. Section 10A requires the asset to have been held at the date of departure. Acquired-and-disposed during non-residence is outside the rule.

"Section 10A applies to companies." Wrong. The rule applies to individuals only (and to trustees of certain offshore trusts under separate provisions). Company residence rules and corporate CGT operate independently.

"If I return mid-tax-year I can use split-year to escape recapture." Partially wrong. Split-year carves the tax year of return into a UK part and an overseas part, but s.10A deems the recaptured gain to arise in the year of return regardless. The split-year date affects ordinary disposals in the return year, not the s.10A deeming itself.