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HMRC internal manual

Capital Gains Manual

Effects of residence/domicile: gains arising to non-resident companies: section 13 TCGA 1992


A company which is resident in the United Kingdom is charged Corporation Tax on its chargeable gains, see CG10950. If a non-UK resident company is not within the charge to Capital Gains Tax the gains it realises are normally not chargeable to UK tax at all. However such gains can be within the charge to tax in the hands of the company’s participators if

  • the non-resident company realising the gains would be a close company if it was resident in the UK


  • a person who is directly or indirectly a participator in the company is resident or ordinary resident in the UK


  • that person, together with persons connected with them, has an interest as a participator amounting to more than

    • one tenth of the company for the years to 2011-12 (or by election to 2011-12) or
    • twenty five percent of the company for 2012-13 and later years.

If the necessary conditions are satisfied then, subject to certain exemptions, an appropriate part of the company’s gain is treated as accruing to the person resident or ordinarily resident (see below)in the UK. See CG57200+ for further details. If the remittance basis applies to the individual to whom the gain on a non-UK situs asset is treated as accruing, the gain may be a foreign chargeable gain, see CG57200 and CG25313.

In respect of gains accruing to a company before 6 April 2008 there was a further condition for a gain to be assessable on an individual participator: the individual had to be domiciled in the United Kingdom as well as resident or ordinarily resident there. This requirement was repealed by Finance Act 2008.

For more information on the attribution of non-resident companies’ gains in this way, see CG57200+.

A Statutory Residence Test for individuals was introduced for years from 6/4/2013. In addition for 2013/14 and later years, Ordinary residence no longer needs to be considered. Guidance on the Statutory Residence Test can be found in the RDR3 Guidance Note: Statutory Residence Test (SRT).