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HMRC internal manual

Oil Taxation Manual

Capital gains: non residents: double taxation agreements

Double Taxation Treaties may restrict UK powers to tax gains chargeable by virtue of the general rules and the extension to the general rules under TCGA92\S276. The terms of a Capital Gains Article may differ widely between agreements and much may depend on the nature of the asset on which the gain accrues. It is therefore always necessary to refer to the relevant treaty and to identify the asset to which the gains relate. However, in general, most treaties give primary taxing rights on gains on ‘immovable property’ to the state in which the property is situated.

In the UK immovable property generally means land, the buildings erected on land, minerals in the soil and rights over land and includes, for example, a licence interest and an oil reservoir. For the purposes of the Capital Gains Article the phrase ‘immovable property’ usually takes the meaning ascribed to it in the Income from Immovable Property Article.

Refer to Double Taxation Relief manual for particular agreements. The OECD Commentary on Articles 6 and 13 of the Model Tax Convention on Income and on Capital may also assist in interpreting treaties.

There is further information on Double Taxation Agreements in this manual at OT41500.