Income Tax (Trading and Other Income) Act 2005 section 18

Effect of company starting or ceasing to be within charge to income tax

Section 18 deals with what happens for income tax purposes when a company moves into or out of the income tax regime in respect of a trade, typically as a result of company migration.

• This section applies to companies that start or stop being within the charge to income tax on their trading profits
• A company entering the income tax charge is treated as if it has just started carrying on the trade at that point
• A company leaving the income tax charge is treated as if it has permanently ceased carrying on the trade at that point
• The most common scenario is cross-border company migration, where a non-resident company trades in the UK without a permanent establishment and shifts between income tax and corporation tax regimes