From April 2008 non-domiciled individuals (non-doms) who claim the remittance basis have been able to elect to receive tax relief for capital losses on disposals of overseas assets.

A non-dom's overseas capital losses can then be set against worldwide capital gains. It may be that this election will prove very useful if a non-dom is facing a tax charge for, for example, gains on offshore bank accounts. These can arise as a result of a currency gain, as these accounts are treated as assets under capital gains tax rules in the UK.

  • The election is irrevocable and applies for the year in which it is made and all future tax years.
    • The exception is if the individual becomes UK domiciled or deemed domiciled, when the election will cease to have effect.
  • The election needs to be considered carefully, as it affects the order of set-off of gains, matching offshore gains against offshore losses before UK losses.
    • Once the election is made there is no requirement that all foreign capital losses must be claimed each year; the individual can choose not to claim losses in certain years if this is beneficial to their overall tax position.
  • The election must be made within 4 years after the end of the tax year. An election for 2019/20 must be made by 5 April 2024.
  • Individuals who have not claimed the remittance basis since the 2008/09 tax year can claim foreign capital losses without the need to make an election.

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