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HMRC internal manual

International Manual

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HM Revenue & Customs
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Foreign Permanent Establishments of UK Companies: chargeable gains: exclusion of gains of close companies

Treatment for close companies

CTA09/S18P(2) excludes chargeable gains of close companies from any relevant profits or relevant losses amount for CTA09/S18A.

The definition of close company for the purposes of CTA09 is at CTA10/Part10/Chapter 2. Where a gain is affected by this exclusion from branch exemption the normal rules for credit relief will apply in respect of any foreign tax paid.

For relevant accounting periods beginning on or after 1 January 2013.

CTA09/S18P(3) disapplies the restriction in S18P(2) for close companies when chargeable gains arise from the disposal of assets used solely for the purposes of the trade carried on in the relevant foreign territory through a permanent establishment, or chargeable gains arise from the disposal of currency or debt which was or represented money used for the purposes of such trade. This means such chargeable gains can be included in a relevant profits amount or relevant losses amount for the purposes of CTA/09/S18A for relevant accounting periods beginning on or after 1 January 2013.