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HMRC internal manual

Capital Gains Manual

Migration and exit charges: exit charges for companies

TCGA92/S185 & TCGA92/S186

For a detailed explanation of when a company is resident in the UK, of when it is treated as dual resident or as treaty non-resident, of the tests for residence and of when it is treated as migrating see CTM34100 onwards and INTM120000 onwards. See also CG42300+.

Until 1993 a company incorporated in the UK was normally treated as resident here. It was therefore exceptional for such a company to be able to migrate. However it was also possible for it to become resident elsewhere so that it was dual resident. On becoming dual resident a company sometimes also became treaty non-resident, see CG42321. After 1993 a UK registered company that is treaty non-resident is treated as not resident, see CG42303.

A company incorporated elsewhere may be resident in the UK because its central management and control are exercised here. Such a company may be dual resident if it is also resident elsewhere, for example, under an incorporation rule in the country of incorporation. It could then be treaty non-resident, see CG42321. Since 1993 such a company is treated as not resident, see CG42303.

There is an occasion of charge imposed by TCGA92/S185 if a company ceases to be resident in the UK. The occasion of charge occurs immediately before the company ceases to be resident. Subject to exclusions for assets which relate to any trade the company continues to carry on in the UK through a permanent establishment, the company is deemed to have disposed of and immediately reacquired its chargeable assets at market value at that time. See CG42370 for further details.