Taxation of Chargeable Gains Act 1992

[F1 Territorial scope U.K.

Textual Amendments

F1 Pt. 1 substituted (with effect in accordance with Sch. 1 paras. 120, 123 of the amending Act) by Finance Act 2019 (c. 1), Sch. 1 para. 2

2B Territorial scope of charge to corporation tax on chargeable gains U.K.

(1) A company which is resident in the United Kingdom in an accounting period is chargeable to corporation tax on chargeable gains accruing to the company in the period on the disposal of assets wherever situated.

(2) This is subject to Chapter 3A of Part 2 of CTA 2009 (exemption from charge in respect of profits of foreign permanent establishments).

(3) A company which is not resident in the United Kingdom is chargeable to corporation tax on chargeable gains that—

(a) accrue to the company on the disposal of assets situated in the United Kingdom that have a relevant connection to the company's UK permanent establishment (see section 2C),

(b) accrue at a time when it has that permanent establishment, and

(c) are, in accordance with sections 20 to 32 of CTA 2009, attributable to that permanent establishment.

(4) In addition, a company which is not resident in the United Kingdom is chargeable to corporation tax on chargeable gains accruing to the company on the disposal of assets not within subsection (3) that are—

(a) interests in UK land, or

(b) assets (wherever situated) not within paragraph (a) that derive at least 75% of their value from UK land where the company has a substantial indirect interest in that land.

(5) Section 1C applies for the purposes of subsection (4)(a) as it applies for the purposes of section 1A(3)(b) (disposing of interests in UK land).

(6) The reference in subsection (4)(b) to assets deriving at least 75% of their value from UK land where the company has a substantial indirect interest in that land is to be read in accordance with Schedule 1A.

2C Non-UK resident company with UK permanent establishment U.K.

(1) For the purposes of section 2B(3) a company has a UK permanent establishment at any time if, at that time, the company carries on a trade in the United Kingdom through a permanent establishment there.

(2) For the purposes of section 2B(3) an asset has a relevant connection to a company's UK permanent establishment if—

(a) it is, or was, used in or for the purposes of the trade at or before the time of the disposal,

(b) it is, or was, used or held for the purposes of the permanent establishment at or before that time, or

(c) it is acquired for use by or for the purposes of the permanent establishment.

(3) Section 2B(3) does not apply to a company which, as a result of Part 2 of TIOPA 2010 (double taxation arrangements), is exempt from corporation tax for the accounting period in respect of the profits of the permanent establishment.

(4) In the case of the long-term business of an overseas life insurance company, subsection (2) has effect as if for paragraph (b) there were substituted—

“(b) it is, or was, used or held for the purposes of the permanent establishment at or before that time (irrespective of where it is situated at that time),”.

(5) In this section references to a trade include an office and references to carrying on a trade include holding an office.]