Gains attributable to participators in non-UK resident companies

As part of the changes introduced by Schedule 1 of Finance Act 2019 (FA 2019), Part 1 of Taxation of Chargeable Gains Act 1992 (TCGA 1992) was rewritten. The new TCGA 1992, Part 1 largely restates the existing law but also includes additional provisions to bring disposals by non-UK residents of UK land from 6 April 2019 within the charge to tax. The rewrite was intended to modernise and simplify the structure of the UK capital gains rules as well as to accommodate the rules on disposals of interests in assets relating to UK land by non-UK residents. Where the legislation has been restated, the legislative links to the previous law shown in this guidance note are for reference only. The former text of TCGA 1992, Part 1 ― before substitution by FA 2019, Sch 1 ― is set out in full at the end of the rewritten TCGA 1992, Part 1 in the Yellow Tax Handbook.

Non-resident companies are not normally liable to tax on chargeable gains even if the assets disposed of by the company are situated in the UK. The main exceptions to this are:

• •where the assets are used for the purposes of a trade carried on in the UK through a permanent establishment (PE), such as a branch or agency (TCGA 1992, s 2C (from 6 April 2019); TCGA 1992, s 10B (up to 5 April 2019))
• •for disposals made between 6 April 2013 and 5 April 2019, where the assets are interests in UK residential property and the whole or part of the gain is ‘ Annual Tax on Enveloped Dwellings (ATED) related’ or is within the scope of the Finance Act 2015 non-residents CGT (NRCGT) regime. See the Overview of the ATED regime and Capital gains tax charge on UK residential property owned by non-residents guidance