CTM34130 - 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 S862, 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 CTA09/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 the stock remains 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.