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HMRC internal manual

Capital Gains Manual

Non-resident companies: gains accruing on/after 28/11/95: outline of tax credit relief

When a non-resident company makes a distribution in respect of a gain within a certain time of the gain accruing, see CG57354, and a UK resident participator has paid tax in respect of the gain under TCGA92/S13, then the tax paid may be set against any tax liability arising to that participator in respect of the distribution (TCGA92/S13(5A)). There are ordering rules in TCGA92/S13(7A) to determine the amounts of tax available for relief and set-off, see CG57375.

Relief under TCGA92/S13(5A) is available when

  • a capital gain has accrued to a non-resident company on or after 28 November 1995

and

  • all or part of the capital gain has been attributed to a UK resident participator under Section 13(2)

and

  • the UK resident participator has paid Capital Gains Tax (or Corporation Tax in the case of a company) in respect of the gain attributed

then that tax is available for relief in appropriate circumstances.

It is important to note that relief under TCGA92/S13(5A) is only due where a charge arises under section 13 in respect of a gain and a further charge arises in respect of a distribution of an amount in respect of the same gain, and that both charges arise on the same person. Where a gain is attributed to participator A and the distribution is made to participator B no relief can be given to B as B has not paid tax under section 13.