Corporate capital gains ― overview

Produced by Tolley

The following Corporation Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Corporate capital gains ― overview
  • Scope of charge
  • Calculation of gains
  • Groups of companies
  • Substantial shareholding exemption
  • Rollover relief
  • Links to articles ― corporate capital gains

Corporate capital gains ― overview

Scope of charge

A company is liable to corporation tax in respect of its chargeable gains. The total chargeable gains arising in an accounting period, after deducting allowable capital losses arising in the period or carried forward from previous periods, are included as part of the company’s taxable total profits and taxed at the rate of corporation tax in force for the relevant financial year. See the Computation of corporation tax guidance note for details of the latest rates.

A chargeable gain or allowable loss may arise when a company disposes of an asset by way of sale, gift or in any other manner. The receipt of a capital sum in respect of compensation for the damage or destruction of a company asset may also give rise to a chargeable gain. Disposals of assets subject to the corporate intangibles regime do not give rise to chargeable gains. Instead, gains and losses are dealt with under that regime. See the Corporate intangibles tax regime ― overview guidance note for further details on disposals of intangible assets.

All companies that are treated as resident in the UK are liable to corporation tax on their chargeable gains, wherever the asset is situated.

A non-UK resident company is liable to corporation tax only on chargeable gains on disposal of:

  1. where the company carries on a trade in the UK via a permanent establishment, UK assets with a connection to the permanent establishment

  2. interests in UK land

  3. interests in ‘UK property rich’

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