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Usually, non-resident companies are chargeable only on gains from the disposal of trading assets situated in the UK where a trade is carried on in the UK via a permanent establishment, or on the gains arising on the disposal of UK land.

As there could be scope for a UK resident taxpayer to avoid UK capital gains tax (CGT) on disposals by holding their personal assets within a non-resident company, there are anti-avoidance provisions to attribute gains made by the non-resident company to UK resident shareholders in proportion to their shareholding in the non-resident company. This applies provided the conditions discussed below are met.

It is the gain that is attributed to the UK resident shareholder, not the disposal; the gain must be calculated using the rules for UK companies (ie using indexation allowance as appropriate, etc), and the relevant proportion of the gain is attributed to the shareholder. For details of how to calculate the gain within the company, see the Calculation of corporate capital gains guidance note.

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