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HMRC internal manual

Capital Gains Manual

Location of assets: importance for charge to tax

Circumstances in which the existence of tax charge on any gains depends on the location of assets include

  • disposals of assets by an individual who is resident and/or ordinarily resident* in the UK but who is not domiciled, and not deemed domiciled** , in the UK: gains on disposals of assets situated outside the UK may be chargeable only to the extent that they are remitted to the UK, TCGA92/S12. This is known as the remittance basis of taxation. See CG25300+ for further guidance.
  • disposals (or deemed disposals on cessation of trading) of assets by a person other than a company who is neither resident nor ordinarily resident* in the UK but is carrying on a trade, profession or vocation in the UK through a branch or agency. Gains on such disposals are chargeable provided such persons have either
    • used the assets in or for the purposes of the trade, profession or vocation, or
    • used or held assets for the purposes of the branch or agency and the assets are situated in the UK when disposed of, TCGA92/S10 and TCGA92/S25.

      See CG25500+ for further guidance.

 

  • a transfer abroad of an asset situated in the UK by a person, other than a company, who is neither resident nor ordinarily resident* in the UK but who is carrying on a trade, profession or vocation in the UK through a branch or agency is chargeable provided such persons have either
    • used the assets in or for the purposes of the trade, profession or vocation, or
    • used or held assets for the purposes of the branch or agency, TCGA92/S25. See CG25530 for further details.

      Similar rules apply to a non-resident company trading in the UK through a permanent establishment, in respect of assets situated in the UK and used in or for the purposes of the permanent establishment, see CG42100+.

      *For 2013/14 and subsequent years ordinary residence does not need to be considered.

      **For 2017/18 and subsequent years an individual may be deemed domiciled in the UK. Guidance on deemed domicile is within the Residence, Domicile and Remittance Basis Manual.