Taxation of Chargeable Gains Act 1992 section 3

Gains attributed to UK resident individuals etc.

Section 3 deals with the attribution of chargeable gains made by non-UK resident close companies to their UK resident participators, where those gains are connected to tax avoidance and are not linked to genuine foreign trading or economically significant foreign activities.

• Chargeable gains of non-UK resident close companies connected to avoidance are apportioned to UK resident participators and indirect participators in proportion to their interests in the company
• No gain is attributed to an individual where it arises in the overseas part of a split year, or where the person's share (together with connected persons) is 25% or less of the total gain being apportioned
• Indirect participators are traced through any number of non-UK resident close companies in a chain, with gains apportioned at each level according to participators' interests
• Losses of the company may also be attributed to a participator, but only to the extent needed to reduce or eliminate gains already attributed to that person under this section in the same chargeable period