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HMRC internal manual

Capital Gains Manual

From
HM Revenue & Customs
Updated
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Non residents with a UK branch or agency: disposals: computation

The computation of a gain on the disposal of an asset of a UK branch or agency is carried out in the same way as any other computation. In particular, you should not permit an acquisition cost based on the market value of the asset when it began to be used for the branch or agency.

The only exception relates to cases in which the activity carried on by the branch or agency is a profession or vocation and the asset was held on 14 March 1989.

If the asset

  • ceased to be used in or for the purposes of the profession or vocation or ceased to be held for the purposes of the branch or agency before 14 March 1989 and
  • has not been so used on or after that date

any gain on the disposal of that asset is exempt from Capital Gains Tax.

If the profession or vocation

  • started before 14 March 1989 and
  • the asset was acquired before that date and
  • the asset was still in use for the purposes of the profession or vocation immediately before that date

then the asset is deemed to have been disposed of immediately before 14 March 1989 and immediately reacquired at market value. In computing any gain on disposal of such an asset the acquisition cost will be the market value of the asset immediately before 14 March 1989.