Paragraph 8 Designation of qualifying overseas capital

A designation election for a tax year must be made before the end of the period of 12 months beginning with 31 January after the end of that tax year.

The designation must—

For the purposes of designating an amount of qualifying overseas capital of an individual that—

the value of that amount is the value of the amount when it first arose to the individual.

In this Part and in Part 2 “remittance provision” means paragraph 2(2) or (5) or paragraph 6(1)(b).

Where—

it is not to be regarded as designated under that paragraph for the purposes of paragraph 10(7) (relief for offshore income gains) or paragraph 13 (relief for matched capital payments) as a result of that designation on that basis.

Accordingly two designations of the amount are required to secure the benefit of all of the reliefs that may be available under paragraphs 10(1), 10(7),12(1) and 13—

Where an amount of relevant foreign tax has been paid, or is payable, in respect of an amount of qualifying overseas capital, only so much of the amount as remains after deducting the amount of relevant foreign tax paid, or payable, may be designated.

For the purposes of this paragraph, relevant foreign tax means a tax imposed by the law of a territory outside the United Kingdom that corresponds to—

But where—

sub-paragraph (3) does not apply to the related qualifying overseas capital to the extent that the tax has been, or will be, paid out of those funds.

An individual may designate an amount where it has not yet been determined—

Where the individual considers that an amount designated under sub-paragraph (5) could, if it were qualifying overseas capital, be designated on the basis that it is qualifying overseas capital as a result of a remittance provision, the individual may designate it on that basis.

An amount designated—

is to be nevertheless treated as designated qualifying overseas capital, other than for the purpose of Part 2 of this Schedule (exemptions etc).

Sub-paragraph (6B) applies where—

The amount of income tax or capital gains tax due and payable under section 59B of TMA 1970 in respect of the TRF amount is to be treated as reduced (but not below nil) by the amount of the TRF charge paid in respect of the TRF amount.

Where sub-paragraph (6B) applies, the individual may not amend the return in which the designation election relating to the TRF amount was included to alter or revoke that election (if the return otherwise could have been amended) so as to cause the TRF amount not to be designated.

Where an amount is designated, it is treated as designated qualifying overseas capital from the beginning of the tax year to which the return in which it is designated relates.

An individual who makes a designation election must keep a record of each amount designated.