Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

Capital Gains Manual

From
HM Revenue & Customs
Updated
, see all updates

Migration of companies: departures from UK: ceasing to be resident in UK

If a company ceases to be resident in the UK certain exit charges and restrictions to roll-over relief will apply. See CG42370 and CG42380 for guidance.

When a company ceases to be resident in the UK part way through a year of assessment an accounting period ends and another one begins, CTA09/S9 and CTA09/S10. For the accounting period when the company is resident it is within the charge to Corporation Tax. Any gains arising in that part of the year of assessment will therefore be assessed to Corporation Tax on capital gains in accordance with CTA09/S2.

For the part of the year of assessment when the company is not resident in the UK

  • if the company is not carrying on a trade in the UK through a permanent establishment it is not within the charge to Corporation Tax, CTA09/S5 (2)
  • if the company is carrying on a trade in the UK through a permanent establishment it is only within the charge to Corporation Tax in respect of gains that are chargeable gains by reason of TCGA92/S10B.

Up to and including the tax year 2012-13, where there is some time in the year of assessment when the company is resident in the UK, any gains arising in the second part of the year of assessment and not within the charge to Corporation Tax are within the charge to Capital Gains Tax because the conditions of TCGA92/S2 are satisfied. However, for tax years 2013-14 et seq. the residence conditions in TCGA92/S2 are amended by FA13/S219(1). TCGA92/S2(1A)(d) sets out that that the person to whom the chargeable gain accrues must be resident in the United Kingdom when the gain accrues for it to comprise a chargeable gain. Gains accruing during the part of the year when the company is not UK resident, therefore, no longer comprise chargeable gains as defined in TCGA92/S2(1).