Chapter 1: Treatment of branch or agency as UK representative of non‑UK resident
Overview
1244.This Chapter determines the extent to which and the period for which a branch or agency in the United Kingdom through which a non‑UK resident carries on a trade, profession or vocation is the UK representative of the non‑UK resident in relation to gains in respect of which the non‑UK resident is chargeable to capital gains tax under section 10 of TCGA.
Section 271A: Overview of Chapter
1245.This section introduces the Chapter and provides a signpost to Chapter 2. It is new.
Section 271B: Branch or agency treated as UK representative
1246.This section determines who is a UK representative of a non‑UK resident in relation to amounts to which the non‑UK resident is chargeable to capital gains tax under section 10. It is based on section 126(2), (3), (4) and (5) of FA 1995.
1247.The amounts are those chargeable by reference to a branch or agency in the United Kingdom through which the non‑UK resident carries on a trade, profession or vocation. The person who is the UK representative in relation to those amounts is the branch or agency that, in accordance with Chapter 2B of Part 14 of ITA, is the UK representative of the non‑UK resident in relation to income of the non‑UK resident from the trade, profession or vocation arising through the branch or agency. See subsections (1) and (2).
1248.As it is a condition of chargeability to capital gains tax under section 10 of TCGA that the non‑UK resident is carrying on a trade, profession or vocation through a branch or agency in the United Kingdom, it must always be the case (if the non‑UK resident is to incur chargeability under that section) that there is a person who, under Chapter 2B of Part 14 of ITA, is the non‑UK resident’s UK representative in relation to the non‑UK resident’s liabilities and obligations in respect of tax on income arising through the branch or agency. When considering whether a person is to be treated as a UK representative in relation to amounts of income for income tax purposes, it is immaterial whether or not there are in fact any amounts of income which are chargeable to income tax.
1249.If a branch or agency in the United Kingdom of a non‑UK resident ceases to be the non‑UK resident’s branch or agency, the branch or agency nevertheless continues thereafter to be the UK representative of the non‑UK resident in relation to the amounts for which the non‑UK resident is chargeable mentioned in subsection (2). See Rule 2 in subsection (3).
Section 271C: Trade or profession carried on in partnership
1250.This section contains special rules to deal with the case where the non‑UK resident carries on a trade or profession in partnership. It is based on section 126(6), (7) and (7A) of FA 1995.
1251.Subsections (1) and (2) provide that, if a partnership carries on a trade or profession in the United Kingdom through a branch or agency, the branch or agency is treated as the UK representative of any non‑UK resident partner in relation to the share of the gains in respect of which that partner is chargeable under section 10 of TCGA.
1252.Subsections (3) and (4) provide that section 271B also applies if a partnership which includes both UK resident and non‑UK resident members carries on a trade or profession in the United Kingdom, whether it does so itself or through a branch or agency.
1253.In this case, the partnership itself is treated as the UK representative of the non‑UK resident partner in relation to the share of the gains in respect of which that partner is chargeable under section 10 of TCGA. This is so notwithstanding that there may also be a branch or agency which is the non‑UK resident partner’s UK representative in relation to those chargeable gains. All the partners are as a consequence jointly liable for capital gains tax on the gains of the non‑UK resident partner.
Section 271D: Interpretation of Chapter
1254.This section defines two terms for the purposes of the Chapter. It is based on section 126(1) and (8) of FA 1995.
