CG73810 | Non-Resident Capital Gains Tax (NRCGT) – Disposals on or after 6 April 2015 to 5 April 2019: Companies: Special rules: Introduction

A fundamental feature of the charge to non-resident CGT is that it is a CGT charge in all cases. As a general rule the chargeable gains of companies are subject to corporation tax (CT), but that is not the case with the charge on disposals of UK residential property that applied up to 5 April 2019. For later disposals see CG73920 onwards.

Thus the main charging provision of TCGA/S14D* states that “a person” is chargeable to CGT in respect of chargeable NRCGT gains. There is nothing to limit the scope of “person” from applying across the board to individuals and companies alike. In a similar vein, TCGA92/S188A to K are concerned with the way the NRCGT charge applies to groups of companies, and TCGA92/Sch B1/Part 1 effectively provides exemptions from a charge to NRCGT for companies that are not “closely-held”.

It follows that the basic methods of computing non-resident CGT gains and losses laid down in Sch 4ZZB apply to individuals and companies alike. Consequently, the descriptions of the various Sch 4 computation processes that have appeared in CG73760+ in relation to individuals do also need to be consulted in the case of companies.

Sch 4ZZB/Part 5 does, however, indicate that computations under Sch 4ZZB in the case of companies are to be made as if the computations were for corporation tax purposes. That has the main consequence that indexation allowance is to be included in calculations involving companies. The aim of the new legislation is therefore a non-resident company making a non-resident CGT disposal should be in broadly the same position as a UK resident company making a similar disposal. (However, that principle may in practice be modified to a certain extent because of basic differences between CGT and CT.)

This guidance considers how a range of existing CGT provisions are modified in the way they apply to non-resident companies with the introduction of non-resident CGT; explains the new arrangements for pooling of NRCGT gains and losses in groups of companies; and considers how the computation rules apply in the case of companies.

* This section was re-written for disposals from 6 April 2019 see CG10150