CG57305 | Non-resident companies: exemptions

TCGA92/S13(4)* prevents any chargeable gain being treated as accruing to a participator if the aggregate amount of the company’s gain which would otherwise be attributed to them and to persons connected with them does not exceed:

• for the years up to and including 2011-12 - 10 per cent of the company’s total gain;

• for 2012-13 and subsequent years - 25 per cent of the company’s total gain.

Furnished holiday lettings are no longer treated as a trade from 6 April 2025.

TCGA92/S13(5)(b)* disapplies TCGA92/S13 for gains on the disposal of all assets used only for the purposes of a trade carried on by the non-resident company either wholly

• outside the UK, or

• in a part of a trade and that part is carried on wholly outside the UK.

Therefore gains on all such assets (including intangible assets such as goodwill) will not be treated as chargeable gains accruing to participators.

For gains on disposals from 6 April 2012, the definition of trade assets for the purposes of TCGA93/S13 was extended and may also include assets such as accommodation or an interest or right in accommodation, which is situated outside the UK where the accommodation has been furnished holiday accommodation.

TCGA92/S13* does not apply to gains arising on the disposal of

• any foreign currency held by a non-resident company

• credit balances on a foreign currency bank account

provided that the funds are used for the purposes of a trade carried on by a non-resident company wholly outside the UK. The purpose of the exemption and the exemption for trading assets is to prevent TCGA92/S13 applying to a foreign company's trading activities. You should not enquire about foreign currency operations unless there is evidence the foreign currency was not held for trading purposes and the amounts involved are likely to be material.

TCGA92/S13* does not apply to assets which are used for the purposes of a trade carried on in the UK through a permanent establishment. Any gain on the disposal of these assets is already taxed under TCGA92/S10B*. The exemption in applies to all gains caught by TCGA92/S10B including deemed disposals when the trade ceases or when the assets are transferred outside the UK. For guidance on TCGA92/S10B see CG42100+.

For gains on disposals in the period from 6 April 2012 to 5 April 2025, trade assets also included assets such as accommodation or an interest or right in accommodation, which is situated outside the UK where the accommodation has been furnished holiday accommodation for each relevant period.

A relevant period is:

the period of 12 months ending with the date of disposal

and

each of the two preceding periods of 12 months.

If the company has been the beneficial owner of the accommodation (or interest or right in accommodation) for a period longer than 36 months then relevant periods will be the 12 months up to the date of disposal and the preceding two periods of 12 months.

*TCGA92/S13 was re-written for disposals from 6th of April 2019 see CG10150.