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HMRC internal manual

Capital Gains Manual

From
HM Revenue & Customs
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Capital payment to non-resident close company controlled by UK residents

TCGA92/S96(2) to (6)

If the payment is received by a non-resident company controlled by UK resident persons it is treated as received by them in proportion to their ownership of the company. See CG38685 if the company is not controlled by UK residents. See CG38690 for guidance on the meaning of control.

If the company is controlled by one person alone the capital payment is treated as received by that person, TCGA92/S96(3).

If the company can be controlled by more than one person acting alone the capital payment is treated as received in equal parts by those who are UK resident. If only one person is UK resident they are treated as receiving the entire payment, TCGA92/S96(4).

If the company can be controlled by more than one person acting together the payment is treated as received by each participator in the company whatever their residence. Because the different definitions of control in the Company Taxation Act 2010 may give different proportions the allocation should be made on a just and reasonable basis. If any participator has a less than 5% interest in the company they are treated as not receiving a part of the payment, TCGA92/S96(5).