Corporate chargeable gains

This guidance note explains the general rules and provides an overview of the corporation tax implications of the disposal of company assets.

Scope of charge

When a company disposes of an asset by way of sale, gift or in any other manner, a chargeable gain or allowable loss may arise. The receipt of a capital sum in respect of compensation for the damage or destructionof a company asset may also give rise to a chargeable gain.

CTA 2009, s 2

All companies that are treated as resident in the UK are liable to corporation tax on their chargeable gains. 
CTA 2009, s 5; TCGA 1992, s 2A (from 6 April 2019); TCGA 1992, s 8 (up to 5 April 2019)

See the Residence of companies and Permanent establishment guidance notes for further details on determining a company’s residence.

Groups of companies

Special rules apply in respect of the calculation of chargeable gains for companies that are part of a group. A company will be grouped with all of its 75% subsidiaries and its subsidiaries’ 75% subsidiaries, etc but only to the extent that a subsidiary is an effective 51% subsidiary of the holding company (referred to as the principal company).