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HMRC internal manual

Capital Gains Manual

Migration of companies: postponed charges: example

B Ltd is a 100 per cent subsidiary of A Ltd. It is incorporated outside the UK. Both A Ltd and B Ltd have their central management and control in the UK until 30 April 2004. On that date the central management and control of B Ltd is transferred outside the UK so that the company ceases to be UK resident, see CTM34120. A Ltd and B Ltd make an election under TCGA92/S187 that the exit charge under TCGA92/S185 should be postponed. See CG42370 for guidance on exit charges and CG42390 for guidance on the postponement of exit charges.

The gains and losses on the deemed disposal of B Ltd’s assets on 30 April 2004 are as follows. All the assets are situated outside the UK.

Asset No 1 gain 10,000
Asset No 2 gain 8,000
Asset No 3 gain 32,000
Asset No 4 loss (12,000)
The postponed gain is thus 38,000