Taxation of Chargeable Gains Act 1992 c. 12
Part I CAPITAL GAINS TAX AND COR****ATION TAX ON CHARGEABLE GAINS
Residence etc.
This version in force from: July 21, 2008 to present
13.=97 Attribution of gains to members of non-resident companies.
(1) This section applies as respects chargeable gains accruing to a
company=97
(a) which is not resident in the United Kingdom, and
(b) which would be a close company if it were resident in the United
Kingdom.
(2) Subject to this section, every person who at the time when the
chargeable gain accrues to the company is resident or ordinarily
resident in the United Kingdom[ and]1 is a participator in the
company, shall be treated for the purposes of this Act as if a part of
the chargeable gain had accrued to him.
(3) That part shall be equal to the pro****tion of the gain that
corresponds to the extent of the participator's interest as a
participator in the company.
(4) Subsection (2) above shall not apply in the case of any
participator in the company to which the gain accrues where the
aggregate amount falling under that subsection to be ap****tioned to
him and to persons connected with him does not exceed one tenth of the
gain.
(5) This section shall not apply in relation to=97
(b) a chargeable gain accruing on the disposal of an asset used, and
used only=96
(i) for the purposes of a trade carried on by the company wholly
outside the United Kingdom, or
(ii) for the purposes of the part carried on outside the United
Kingdom of a trade carried on by the company partly within and partly
outside the United Kingdom,.
(c) a chargeable gain accruing on the disposal of currency or of a
debt within section 252(1), where the currency or debt is or
represents money in use for the purposes of a trade carried on by the
company wholly outside the United Kingdom, or
(d) to a chargeable gain in respect of which the company is chargeable
to tax by virtue of section 10B2.
(5A) Where=96
(a) an amount of tax is paid by a person in pursuance of subsection
(2) above, and
(b) an amount in respect of the chargeable gain is distributed (either
by way of dividend or distribution of capital or on the dissolution of
the company) before the end of the period specified in subsection (5B)
below,
the amount of tax (so far as neither reimbursed by the company nor
applied as a deduction under subsection (7) below) shall be applied
for reducing or extingui****ng any liability of that person to income
tax, capital gains tax or cor****ation tax in respect of the
distribution.
(5B) The period referred to in subsection (5A)(b) above is the period
of three years from=96
(a) the end of the period of account of the company in which the
chargeable gain accrued, or
(b) the end of the period of twelve months beginning with the date on
which the chargeable gain accrued,
whichever is earlier.
(7) The amount of capital gains tax paid by a person in pursuance of
subsection (2) above (so far as neither reimbursed by the company nor
applied under subsection (5A) above for reducing any liability to tax)
shall be allowable as a deduction in the computation under this Act of
a gain accruing on the disposal by him of any asset representing his
interest as a participator in the company.
(7A) In ascertaining for the purposes of subsection (5A) or (7) above
the amount of capital gains tax or income tax chargeable on any person
for any year on or in respect of any chargeable gain or distribution=97
(a) any such distribution as is mentioned in subsection (5A)(b) above
and falls to be treated as income of that person for that year shall
be regarded as forming the highest part of the income on which he is
chargeable to tax for the year.
(8) So far as it would go to reduce or extinguish chargeable gains
accruing by virtue of this section to a person in a year of *****sment
this section shall apply in relation to a loss accruing to the company
on the disposal of an asset in that year of *****sment as it would
apply if a gain instead of a loss had accrued to the company on the
disposal, but shall only so apply in relation to that person; and
subject to the preceding provisions of this subsection this section
shall not apply in relation to a loss accruing to the company.
(9) If a person who is a participator in the company at the time when
the chargeable gain accrues to the company is itself a company which
is not resident in the United Kingdom but which would be a close
company if it were resident in the United Kingdom, an amount equal to
the amount ap****tioned under subsection (3) above out of the
chargeable gain to the participating company's interest as a
participator in the company to which the gain accrues shall be further
ap****tioned among the participators in the participating company
according to the extent of their respective interests as
participators, and subsection (2) above shall apply to them
accordingly in relation to the amounts further ap****tioned, and so on
through any number of companies.
(10) The persons treated by this section as if a part of a chargeable
gain accruing to a company had accrued to them shall include the
trustees of a settlement who are participators in the company, or in
any company amongst the participators in which the gain is ap****tioned
under subsection (9) above, if when the gain accrues to the company
the trustees are neither resident nor ordinarily resident in the
United Kingdom.
(10B) A chargeable gain that would be treated as accruing to a person
under subsection (2) above shall not be so treated if=96
(a) it would be so treated only if assets that are assets of a pension
scheme were taken into account in ascertaining that person's interest
as a participator in the company, and
(b) at the time the gain accrues a gain arising on a disposal of those
assets would be exempt from tax by virtue of section 271(1)(c) or
(1A).
In paragraph (a) above =93assets of a pension scheme=94 means assets held
for the purposes of a fund or scheme to which any of the provisions
mentioned in paragraph (b) above applies.
(11) If any tax payable by any person by virtue of subsection (2)
above is paid by the company to which the chargeable gain accrues, or
in a case under subsection (9) above is paid by any such other
company, the amount so paid shall not for the purposes of income tax,
capital gains tax or cor****ation tax be regarded as a payment to the
person by whom the tax was originally payable.
(11A) For the purposes of this section the amount of the gain or loss
accruing at any time to a company that is not resident in the United
Kingdom shall be computed (where it is not the case) as if that
company were within the charge to cor****ation tax on capital gains.
(12) In this section `participator', in relation to a company, has the
same meaning given by section 417(1), of the Taxes Act for the
purposes of Part XI of that Act (close companies).
(13) In this section=97
(a) references to a person's interest as a participator in a company
are references to the interest in the company which is represented by
all the factors by reference to which he falls to be treated as such a
participator; and
(b) references to the extent of such an interest are references to the
pro****tion of the interests as participators of all the participators
in the company (including any who are not resident or ordinarily
resident in the United Kingdom) which on a just and reasonable
ap****tionment is represented by that interest.
(14) For the purposes of this section, where=97
(a) the interest of any person in a company is wholly or partly
represented by an interest which he has under any settlement (`his
beneficial interest'), and
(b) his beneficial interest is the factor, or one of the factors, by
reference to which that person would be treated (apart from this
subsection) as having an interest as a participator in that company,
the interest as a participator in that company which would be that
person's shall be deemed, to the extent that it is represented by his
beneficial interest, to be an interest of the trustees of the
settlement (and not of that person), and references in this section,
in relation to a company, to a participator shall be construed
accordingly.
(15) Any appeal under section 31 of the Management Act involving any
question as to the extent for the purposes of this section of a
person's interest as a participator in a company shall be to the
Special Commissioners.
1. words substituted by Finance Act 2008 c. 9 Sch. 7(2) para. 103
2. In respect of the application of this section to an overseas life
insurance company, section 13(5)(d) shall read as:
(d) to a chargeable gain in respect of which the company is
chargeable to tax by virtue of section 11(2)(b), (c), (d) or (e) of
the Taxes Act.
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