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HMRC internal manual

Double Taxation Relief Manual

Non-residents: UK income: Relief on UK domestication

In some circumstances a non-resident company cannot benefit from roll-over or postponement of a charge where, in a similar situation, a resident company would so benefit. Thus, until 1990, a non-resident company with a branch (or agency) here could not postpone a charge on gains accruing when it transferred the branch to a United Kingdom resident company within the same world group, in other words when the business was domesticated. TCGA92/S172, which was introduced in 1990, allows a claim by the two companies to transfer the assets at no gain/no loss to the transferor in the same way that assets are transferred at no gain/no loss between two resident companies in the same United Kingdom group (and with exceptions similar to those for United Kingdom group transfers).

From 1989 TCGA92/S25 (3), which taxes accumulated gains on the cessation of a branch or agency, could also apply to this situation so if a claim is made under Section 172, Section 25(3) is disapplied.