Taxation of Chargeable Gains Act 1992 section 25

Non-residents: deemed disposals

Section 25 deals with situations where non-resident persons or companies are treated as having disposed of and reacquired assets at market value when those assets cease to be within the charge to UK capital gains tax, either because the assets move outside the UK or because the person ceases to trade in the UK through a branch or agency (permanent establishment).

• When an asset moves outside the UK and ceases to be a chargeable asset, the owner is deemed to have disposed of it at market value immediately before the move and to have reacquired it at that same value, triggering a potential capital gains charge.
• When a non-resident ceases to trade in the UK through a branch or agency, all chargeable assets used in that trade are deemed to have been disposed of at market value immediately before the cessation, unless the assets are transferred to another company under the no gain/no loss rules or remain chargeable assets before the end of the same chargeable period.
• Where an asset moves abroad at the same time as the person ceases to trade through a UK branch or agency, only the cessation charge applies — there is no double charge for both events, and exploration or exploitation assets are excluded from the deemed disposal on moving abroad.
• The deemed disposal is calculated using market value as the disposal proceeds, with the original acquisition cost (not the value at the date trading through the permanent establishment started) used as the base cost, and normal computational rules — including indexation allowance for companies — apply.