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HMRC internal manual

Capital Gains Manual

Non-resident companies: computation of TCGA92/S13 charge: example 1


  • a non-resident company has issued share capital of 150 Ordinary shares
  • A, B and C own 50 shares
  • A and B are all resident in the UK. C has never been resident in the UK
  • the non-resident company realises a gain of 300,000.

Capital Gains Tax computations

You compute the TCGA92/S13 charge as follows.

Step 1

Calculate the gain that would have arisen if the non-resident company had been resident in the UK. This is 300,000.

Step 2

Determine the interests of all participators, including any who are not resident in the UK, by applying the tests of participation appropriate to the circumstances. In this case each of the three participators has a 33 1/3 per cent interest.

Step 3

Calculate the proportion of the gain apportionable to the interests of each participator. Calculate the interests of all participators, including any who are not resident in the UK. In this case the proportion for each participator is 33 1/3% of 300,000 = 100,000.

Step 4

Consider whether the gains calculated in Step 3 represent a just and reasonable apportionment. In this case the apportionment is just and reasonable. Gains of 100,000 are attributed to each of A and B and treated as gains accruing to them on the date on which the gain actually accrued to the company.

C is not liable to UK taxation. But it would not be just and reasonable to reapportion C’s gain of 100,000 to A and B as C has a real economic interest in the non-resident company.