Taxation of Chargeable Gains Act 1992 section 2C

Non-UK resident company with UK permanent establishment

Section 2C defines when a non-UK resident company has a UK permanent establishment and when an asset is connected to that establishment for the purposes of corporation tax on chargeable gains.

• A non-UK resident company has a UK permanent establishment whenever it carries on a trade (or holds an office) in the UK through a permanent establishment located there.
• An asset is connected to the UK permanent establishment if it was used for the trade, held for the purposes of the establishment, or acquired for use by the establishment — at or before the time of disposal.
• The charge does not apply where the company is exempt from corporation tax on the profits of that permanent establishment under double taxation arrangements.
• For overseas life insurance companies carrying on long-term business, an asset held for the permanent establishment is treated as connected regardless of where the asset is physically situated at the time of disposal.