CG13500 - Introduction and computation: occasions of charge: non-residents
Charge on shareholders in non-resident companies: gains made by non-resident companies
TCGA92/S13**
If a company is not resident in the UK and is not carrying on a trade in the UK through a permanent establishment there is normally no occasion of charge to Capital Gains Tax when it disposes of an asset (other than real property see CG73600+, CG73700+ and CG73920+) or otherwise realises a gain. However there can be an occasion of charge in certain circumstances for some other person who is resident or ordinarily resident* in the United Kingdom.
The general conditions are that
- a gain accrues to a non-resident company
- the non-resident company would be a close company if it was resident in the UK
- a person resident or ordinarily resident* in the UK is a direct or indirect participator in the company.
If the necessary conditions are satisfied then there is an occasion of charge for the person resident or ordinarily resident* in the UK when the company realises the gain. Subject to certain exemptions, an appropriate part of the gain is assessable on that person. See CG57200+ for further details.
* For 2013/14 and subsequent years ordinary residence does not need to be considered.
**This provision was re-written for disposals from 6 April 2019 see CG10150.
Non-residents: UK branch/agency or permanent establishment
A person who is neither resident nor ordinarily resident* in the UK is normally outside the charge to Capital Gains Tax or, for companies, the charge to Corporation Tax on capital gains. But if
- a person other than a company carries on a trade, profession or vocation in the UK through a branch or agency, or
- a company carries on a trade in the UK through a permanent establishment
- the disposal is of UK real property (see CG73600+, CG73700+ and CG73920+)
they will be within the appropriate charge as regards certain gains and deemed gains relating to that activity. For further guidance see CG42100+ for companies and CG25500+ for other persons.
However this does not apply to any person who is exempt from Income Tax on the profits of the branch or agency because of a double taxation agreement. Such persons are also exempt from Capital Gains Tax, TCGA92/S10 (4)**.
Nor does it apply to any company exempt from Corporation Tax on the profits of the permanent establishment because of a double taxation agreement. Such companies are also exempt from Corporation Tax on chargeable gains, TCGA/S10B (3)**.
Guidance on the taxation of non-residents trading in the UK can be found at INTM260000 onwards.
* For 2013/14 and subsequent years ordinary residence does not need to be considered.
**These provisions were re-written for disposals from 6 April 2019 see CG10150