Taxation of Chargeable Gains Act 1992 section 3B

Participators and their interests

Section 3B defines who counts as a "participator" in a non-UK resident close company and explains how to measure the extent of their interest, for the purposes of attributing the company's gains to UK residents under section 3.

• A participator's interest in a company encompasses all the factors (such as shareholdings, loan capital, or other rights) by reference to which that person qualifies as a participator, and the extent of that interest is the just and reasonable proportion it represents of all participators' interests taken together.
• Where a person's interest in the company is held through a trust (a settlement), the participator interest is re-attributed to the trustees of that settlement rather than remaining with the individual beneficiary.
• If a person's participator interest only arises because exempt pension scheme assets are taken into account, no gain from the company will be apportioned to that person — provided that a disposal of those pension assets would itself be exempt from tax at the time the gain accrues.
• Exempt pension scheme assets are those held for the purposes of a fund or scheme covered by section 271(1)(c) or (1A) of TCGA 1992, where a disposal of those assets at the relevant time would be free of capital gains tax.