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HMRC internal manual

Company Taxation Manual

From
HM Revenue & Customs
Updated
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Residence: outward company or permanent establishment migration: liabilities arising: introduction

Migration gives rise to possible ‘exit charges’ in relation to a number of tax provisions in the chargeable gains, loan relationships, derivative contracts, corporate intangibles and trading stock fields. These are

  • TCGA92/S25, S185 and S187 (4) - (see CG13430 and CG42360 onwards) deemed disposal of assets
    • when a company ceases to be UK resident, or
    • when assets held for the purposes of a trade carried on by a UK permanent establishment cease to be in the UK, or
    • when the trade of a UK permanent establishment ceases;
       
  • CTA09/S333, S334, S609 and S610 - (see CFM33300 and CFM53110) deemed disposal of loan relationships and derivative contracts at fair value by a company,
    • when it ceases to be UK resident, or
    • when it ceases to hold assets or liabilities for the purposes of a trade carried on by a UK permanent establishment;
       
  • CTA09/S858 and 862 - (see CIRD47030 onwards) deemed realisation of intangible fixed assets at market value at the time it
    • ceases to be UK resident, or
    • ceases to hold assets for the purposes of a trade carried on by a UK permanent establishment;
       
  • CTA09/S162 applied by S41 (2)(b) - (see BIM33470) revaluation of trading stock to open market value when company ceases to be within CT charge (when it migrates, unless stock left in a UK permanent establishment).
     

Permanent establishment broadly means a branch, agency or other fixed place of business through which the trade is carried on - see INTM264050.

Tax charges that may be deferred include charges triggered which have already been postponed under the chargeable gains and corporate intangibles regimes - see CG42390 and CIRD47040.

CTM34131 onwards explains the circumstances in which the exit charges may be deferred. These rules apply broadly with effect from 11 December 2012.