CG18601 - Introduction and computation: paying and recovering tax in exceptional cases
Explains when tax on chargeable gains may be deferred or paid by instalments and when HMRC may recover unpaid tax from another person.
When the normal payment rule does not apply
The person chargeable on a gain is normally responsible for paying the Capital Gains Tax (CGT) or Corporation Tax due.
Different rules may apply where:
legislation changes when the tax must be paid
legislation allows payment by instalments
HMRC may assess or recover an unpaid amount from another person
a UK representative has obligations and liabilities for a non-UK resident
Pay tax by instalments
Consideration payable by instalments
Section 280 of the Taxation of Chargeable Gains Act (TCGA) 1992 may apply where the consideration used to calculate a gain is payable by instalments over a period exceeding 18 months.
See CG14910.
Gifts and deemed disposals
Section 281 TCGA 1992 allows a person to elect to pay CGT arising from certain gifts and deemed disposals in 10 equal yearly instalments.
See CG66452.
Defer tax on delayed remittances
Where the statutory conditions are met, section 279 TCGA 1992 allows Capital Gains Tax on qualifying gains to be deferred.
See CG78401 to CG78409.
Recover unpaid tax from another person
Some provisions allow HMRC to assess or recover unpaid tax from a person other than the person originally chargeable.
The provisions differ and it is important to apply the legislation and guidance.
Recover tax from a donee
Section 282 TCGA 1992 may allow HMRC to assess the recipient of a gift where the tax remains unpaid 12 months after it became payable and the statutory conditions are met.
See CG66451.
Recover tax from a person entitled to trust assets
Section 69(4) TCGA 1992 may allow HMRC to assess another person where tax assessed on trustees remains unpaid for 6 months and the statutory conditions are met.
See CG35400.
Recover tax from a transferor
Where a gain arises under section 168 TCGA 1992 because a transferee ceases to be UK-resident, section 168(7) TCGA 1992 may allow HMRC to assess the transferor if the transferee’s tax remains unpaid for 12 months.
Personal representatives
Sections 74 and 77 TMA 1970 contain provisions relevant to tax chargeable on a person who has died and the liability of personal representatives.
Company reconstructions
Where tax assessed under section 139(5) or (6) TCGA 1992 remains unpaid for 6 months, section 139(7) TCGA 1992 may allow HMRC to assess a person within that subsection who holds the relevant assets and meets the other statutory conditions.
See CG52814.
Connected shareholders receiving capital distributions
Section 189 TCGA 1992 may allow HMRC to recover unpaid Corporation Tax from a connected shareholder who receives, or becomes entitled to receive, a qualifying capital distribution.
See CG40700.
Specified group companies and controlling directors
Section 190 TCGA 1992 may allow HMRC to recover unpaid Corporation Tax from specified group companies or controlling directors.
See CG45973.
Collect tax through a UK representative
A UK representative may have statutory obligations and liabilities in relation to tax due from a non-UK resident.
Capital Gains Tax
Sections 271B to 271J TCGA 1992 contain the UK representative rules for CGT.
A UK branch or agency may be treated as the UK representative of a non-UK resident who carries on a trade, profession or vocation through it.
Section 271F TCGA 1992 sets out the UK representative’s obligations and liabilities.
Sections 271G and 271H TCGA 1992 contain exceptions.
See CG25500.
Corporation Tax
A UK permanent establishment may be the UK representative of a non-UK resident company in relation to profits attributable to the permanent establishment.
The relevant rules are in sections 969 and 970 of the Corporation Tax Act (CTA) 2010. Section 971 CTA 2010 contains exceptions.
See CG42100P and INTM268000.
Apply the relevant specialist guidance
The provisions on this page are not an exhaustive list.
Where another payment, assessment or recovery provision may apply, the relevant legislation and guidance must be considered.