Taxation of Chargeable Gains Act 1992 section 13

Attribution of gains to members of non-resident companies

Section 13 deals with the rules for attributing chargeable gains made by non-UK resident companies to their UK resident members (shareholders or participators), so that those gains can be brought within the scope of UK capital gains tax.

• Where a non-UK resident company makes a chargeable gain, and that company would have been a close company if it had been UK resident, a proportion of that gain can be attributed to UK resident participators who hold a 25% or greater interest.
• The gain attributed to each participator is calculated based on their proportionate interest in the non-resident company, and they are treated as if they had personally made a chargeable gain of that amount.
• The rules apply to individuals, trustees, and personal representatives who are UK resident, and also extend to situations involving chains of non-resident companies, so that gains cannot be sheltered by layering entities outside the UK.
• Various reliefs and exceptions exist, including provisions to avoid double taxation where the gain is later distributed or where the underlying asset is subsequently disposed of by the participator.

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