Q&As

How do the rewritten close company attribution rules in section 3 of the Taxation of Chargeable Gains Act 1992 (TCGA 1992) interact with the rebasing for offshore companies holding UK land on 6 April 2019? TCGA 1992, s 3G requires the attribution calculation to be done on the assumption that the company is resident in the UK, but the rebasing rules require the company to be non-resident. Does this mean a rebasing would never be available?

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Published on LexisPSL on 13/08/2019

The following Tax Q&A provides comprehensive and up to date legal information covering:

  • How do the rewritten close company attribution rules in section 3 of the Taxation of Chargeable Gains Act 1992 (TCGA 1992) interact with the rebasing for offshore companies holding UK land on 6 April 2019? TCGA 1992, s 3G requires the attribution calculation to be done on the assumption that the company is resident in the UK, but the rebasing rules require the company to be non-resident. Does this mean a rebasing would never be available?

When working out any gain falling within the non-resident close company apportionment rules (sections 3–3G of the Taxation of Chargeable Gains Act 1992 (TCGA 1992)), it may be assumed that the company is UK-resident and chargeable to corporation tax: see the new TCGA 1992, s 3G(3). This was true under the previous rules. Therefore, if the non-resident close company owns UK land which it disposes of at a gain, any gain to be apportioned is the one which would arise if that company had been UK-resident at all material times. On this assumption, rebasing as at 6 April 2019 should be irrelevant: the close company apportionment rules have not changed in substance at 6 April 2019 and this gain would have been taxable on participators by apportionme

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