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

HMRC internal manual

Capital Gains Manual

Non-resident companies: indirect interests: UK resident shareholder in the chain of participators

When considering the operation of TCGA92/S13(9) each chain of shareholdings must be considered separately.

Example

Mr and Mrs A are both UK resident. Mr A holds shares in B Limited, a UK resident close company. B Ltd holds shares in C, a non-UK resident close company, which holds shares in D, also a non-UK resident close company. Mrs A holds shares in E, a non-UK resident close company which also holds shares in D.

The gains of D Ltd can be apportioned to Mrs A because she is the first UK resident shareholder in the chain of shareholdings which runs from E to her. The gains of D Ltd cannot be apportioned to Mr A because B Ltd is the first UK resident shareholder in his chain of shareholdings.

You calculate the extent of a person’s indirect interest on a particular test of participation by multiplying the proportional interest in the assets of each company in the chain.

Example

Mr A is a UK resident. He is a 75% participator in B, which is a 75% participator in C, which is a 50% participator in D. B, C and D are non-UK resident close companies.

If D Ltd makes gains of 100,000 the TCGA92/S13 the gain attributed to Mr A is £100,000 x 50% x 75% x 75% = £28,125.