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CG10740 | Persons chargeable: companies

From HM Revenue & Customs · Capital Gains Manual

For capital gains purposes a company includes any body corporate or unincorporated association but does not include a partnership.

  • Local authorities or local authority associations are not specifically excluded from the definition as they are in ICTA88/S832 (1), but these bodies are exempt from a capital gains charge by virtue of TCGA92/S271 (3).

  • TCGA92/S99 provides that the capital gains code should be applied to a unit trust scheme as if it were a company, but only authorised unit trusts are brought within the charge to Corporation Tax by ICTA88/S468. The consequence is that unauthorised unit trusts are within the charge to Capital Gains Tax and not Corporation Tax, see CG41351.

  • Chargeable gains accruing to a company in a fiduciary or representative capacity are excluded from the charge to Corporation Tax. The company is chargeable to Capital Gains Tax in respect of such gains, see CG40200.

*These provisions were re-written for disposals from 6 April 2019 see CG10150.

The `profits' of a company which are chargeable to Corporation Tax comprise income and chargeable gains, and `chargeable gains' are defined as having the same meaning as for the purposes of Capital Gains Tax, that is, they are in general computed in the same way, see CG40200+. Although for assessment purposes the income and chargeable gains are merged into one amount of `profits', they are nevertheless computed separately so that `income' losses are not allowable against capital gains, nor capital losses against income. (See, however, CTM04500 onwards as regards the set-off of trading losses.) There are various rules which apply to particular types of companies and these are to be found in Part VI of TCGA 1992, see CG41000.