Attribution of gains to participators in non-UK companies
Attribution of gains to participators in non-UK companies

The following Tax guidance note provides comprehensive and up to date legal information covering:

  • Attribution of gains to participators in non-UK companies
  • What are the attribution of gains rules?
  • Conditions for the application of the rules on the attribution of gains
  • What happens when the attribution rules apply?
  • Exceptions to the charge
  • Losses on disposals by the non-UK resident company
  • Prevention of double charges
  • What if the non-resident company is part of a non-resident group?
  • Application to non-domiciled individuals
  • Practical application of the attribution of gains rules

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?

A non-UK resident company is normally chargeable to UK tax on gains only if:

  1. it is carrying on a trade in the UK through a permanent establishment (PE), and the disposal is of assets situated in the UK that are used in, or for the purposes of, that trade or that PE, or

  2. the disposal is of UK residential property or, for a disposal on or after 6 April 2019, of any interest in UK land (whether residential or non-residential) or of certain assets deriving their value from UK land

Similarly, a non-UK resident individual or trustee is normally chargeable to UK capital gains tax only if:

  1. he or she carries on a trade or profession in the UK through a branch or agency, and the disposal is of assets situated in the UK that are used in, or for the purposes of, that trade or profession or that branch or agency, or

  2. the disposal is of UK residential property or, for a disposal on or after 6 April 2019, of any interest in UK land (whether residential or