Taxation of Chargeable Gains Act 1992 section 2B

Territorial scope of charge to corporation tax on chargeable gains

Section 2B defines which companies are subject to corporation tax on chargeable gains, depending on whether they are UK resident or non-UK resident, and sets out the territorial reach of the charge.

• UK resident companies are chargeable to corporation tax on gains from disposing of assets anywhere in the world, subject to an exemption for profits of foreign permanent establishments.
• Non-UK resident companies with a UK permanent establishment are chargeable on gains from UK-situated assets that are connected to and attributable to that establishment.
• Non-UK resident companies are also chargeable on gains from disposing of interests in UK land, even without a UK permanent establishment.
• Non-UK resident companies are further chargeable on gains from disposing of assets (wherever situated) that derive at least 75% of their value from UK land, provided the company holds a substantial indirect interest in that land.