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GLOSSARY

Section 13 charge definition

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What does Section 13 charge mean?

A capital gains tax anti-avoidance provision contained in section 13 of the Taxation of Chargeable Gains Act 1992, which attributes capital gains made by a non-UK company to UK shareholders in proportion to their shareholding in the company.

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Attribution of gains to participators in non-UK companies

Attribution of gains to participators in non-UK companies STOP PRESS: Abolition of non-dom regime and introduction of residence-based IHT regime Finance Act 2025 (FA 2025) which received Royal Assent on 20 March 2025, implements legislation to abolish the remittance basis of taxation and replace it with a residence-based regime, commencing on 6 April 2025. FA 2025 also replaces domicile as the key factor in establishing liability to inheritance tax. Other changes include amendment of the rules determining excluded property status, the abolition of protected settlements status of offshore trusts, and changes to overseas workday relief. For information on these changes, see: Practice Notes: The abolition of the remittance basis of taxation from 2025–26 and A new residence-based regime for IHT from 2025–26. This Practice Note is about the rules that can impose a charge to tax on UK persons holding interests in a non-UK resident company if that company disposes of an asset and makes a capital gain. What are the attribution of gains rules?...

Discover our 1 Practice Notes on Section 13 charge

Considering Chapter 3 of the Taxation of Chargeable Gains Act 1992 (TCGA 1992), formerly TCGA 1992, s 13, where a UK tax resident individual who is a shareholder in a non-UK Company that has incurred growth in value of a UK residential property (property acquired before 2015) it is not clear whether a 'section 13 charge' would arise on disposal of that property. Assuming that it does a) would the charge be calculated as per normal CGT principles re allowable expenditure? b) If the UK resident individual was a shareholder in multiple non-resident companies each making a disposal of UK residential property, and where some properties would have a gain up to April 2015 and some a loss, can the UK resident set off the gains and losses?

Considering Chapter 3 of the Taxation of Chargeable Gains Act 1992 (TCGA 1992), formerly TCGA 1992, s 13, where a UK tax resident individual who is a shareholder in a non-UK Company that has incurred growth in value of a UK residential property (property acquired before 2015) it is not clear whether a 'section 13 charge' would arise on disposal of that property. Assuming that it does a) would the charge be calculated as per normal CGT principles re allowable expenditure? b) If the UK resident individual was a shareholder in multiple non-resident companies each making a disposal of UK residential property, and where some properties would have a gain up to April 2015 and some a loss, can the UK resident set off the gains and losses? Summary Section 2B of the Taxation of Chargeable Gains Act 1992 (TCGA 1992) must be applied first, ie taxing the non-UK resident company on its post April 2015 gain on the disposal of residential UK property. This a charge to corporation tax...

See the 1 Q&As about Section 13 charge