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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Effects of residence/domicile: residence etc: companies

Detailed guidance is at CG42000+. Broadly, the chargeable gains of a company are to be included in its total profits. If the company is resident in the UK its profits are chargeable to Corporation Tax. Thus the chargeable gains of such a company will be within the charge to Corporation Tax (CTA09/S2 and CTA09/S5, formerly ICTA88/S6).

A company that is not resident in the UK is not within the charge to Corporation Tax unless it carries on a trade in the UK through a permanent establishment (CTA09/S5). The profits of a company carrying on a trade through a permanent establishment are defined to include chargeable gains on assets situated in the UK and used in or for the purposes of that trade. (For further guidance see CG42100+). The profits so defined are within the charge to Corporation Tax.

From 6 April 2013 a charge to Capital Gains Tax may apply where a company makes a gain that is ATED related. This charge to Capital Gains Tax can apply to both resident and non-resident companies. Detailed guidance on this charge to Capital Gains Tax can be found at CG76300+

As the ordinary residence status of a company is to be taken as being the same as its residence status, see INTM120000 onwards, and the concept of domicile does not need to be considered for companies, the above rules cover all the possibilities for companies. Note in particular that the remittance basis cannot apply to a company’s income or gains and that the special rules governing relief for losses on assets situated outside the UK (see CG25330+) will not be relevant. In general, a capital loss accruing to a company will be an allowable loss if a gain which had accrued on the disposal would have been a chargeable gain.