Finance Act 1989

132 Dual resident companies: deemed disposal. U.K.

(1) For the purposes of this section, a company is a dual resident company ifit is resident in the United Kingdom and falls to be regarded for the purposesof any double taxation relief arrangements as resident in a territory outsidethe United Kingdom.

(2) Where an asset of a dual resident company becomes a prescribed asset, thecompany shall be deemed for all purposes of the M1 CapitalGains Tax Act 1979—

(a) to have disposed of the asset immediately before the time at which itbecame a prescribed asset, and

(b) immediately to have reacquired it,

at its market value at that time.

(3) Subsection (2) above does not apply where the asset becomes a prescribedasset on the company becoming a company which falls to be regarded asmentioned in subsection (1) above.

(4) This section applies where an asset becomes a prescribed asset on or after14th March 1989.

(5) In this section—

• “double taxation relief arrangements” means arrangementshaving effect by virtue of section 788 of the Taxes Act 1988 (as extended tocapital gains tax by section 10 of the M2 Capital Gains TaxAct 1979);

• “prescribed asset”, in relation to a dual resident company,means an asset in respect of which, by virtue of the asset being of adescription specified in any double taxation relief arrangements, the companyfalls to be regarded for the purposes of the arrangements as not liable in theUnited Kingdom to tax on gains accruing to it on a disposal.

Marginal Citations

M1 1979 c. 14.

M2 1979 c. 14.