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In the absence of specific legislation it would be possible for a UK-resident individual, company or trust to avoid a liability to capital gains tax by holding assets through a non-resident company. Such a company would not be within the charge to tax on its capital gains, unless it was carrying on a trade through a permanent establishment.

To counter this possible abuse, there is provision for certain gains made by non-resident companies that would be close companies (see D3.102) if they were resident in the United Kingdom¹ (a non-resident company cannot itself be a close company) to be apportioned to the participators provided²:

1. Ìý

   •ÌýÌýÌýÌý the participators³ of that company are resident in the United Kingdom (although trustees who are not UK resident are also within the scope of the provisions — see below)

2. Ìý

   •ÌýÌýÌýÌý for disposals on or after 6 April 2012, more than 25% of the relevant gain that is deemed to accrue⁴ would be attributed to the participator (on a straight allocation corresponding with the extent of