CTM34210 - Residence: non-resident companies: liability to CT
Under CTA09/S5 (2) a company not resident in the UK is only chargeable to Corporation Tax if
- it carries on a trade in the UK through a permanent establishment or branch/agency (see INTM264090 for the distinction)
- from 5 July 2016, it carries on a trade of dealing in or developing UK land (see BIM60510 onwards)
- from 6 April 2020, it carries on a UK property business or it has other UK property income.
In addition, FA19 widened the scope of TCGA92/S21A to bring gains relised by non-UK resident companies on direct and indirect disposals of UK land within the charge to CT with effect from 6 April 2019 (see CG73920 onwards).
If the company carries on a trade in the UK through a permanent establishment or branch/agency its chargeable profits are, by virtue of CTA09/S19:
- any trading income arising directly or indirectly through or from the permanent establishment or branch/agency,
- any income from property or rights used by, or held by or for, the permanent establishment or branch/ agency except dividends or other distributions received from companies resident in the UK, and
- chargeable gains falling within TCGA92/S10B as a result of assets being
(i) used in or for the purposes of a trade carried on through the permanent establishment, or
(ii) used or held for the purposes of the permanent establishment, or being acquired for use by or for the purposes of the permanent establishment.
The main rule is that non-UK resident companies are not charged to Capital Gains Tax, as distinct from CT on capital gains, in the circumstances described above. But there is an exception where the company is acting in a fiduciary or representative capacity - see CG42030.
Up to 5 April 2019 a company could be charged to CGT where there was an ATED related gain, the Annual Tax on Enveloped Dwellings - see CG73600 onwards.
For guidance on
- company residence see INTM120000 onwards,
- non-residents trading in the UK see INTM260000 onwards,
- the application of Double Taxation Agreements, see DT1700 onwards.