Section 96 — Taxation of Chargeable Gains Act 1992: Payments by and to companies.

Payments by and to companies. 96 1 Where a capital payment is received from a qualifying company which is controlled by the trustees of a settlement at the time it is received, for the purposes of sections 87 to 90 and Schedule 4C it shall be treated as received from the trustees.

2 Where a capital payment is received from the trustees of a settlement (or treated as so received by virtue of subsection (1) above) and it is received by a non-resident qualifying company, the rules in subsections (3) to (6) below shall apply for the purposes of sections 87 to 90 and Schedule 4C .

3 If the company is controlled by one person alone at the time the payment is received, and that person is then resident ... in the United Kingdom, it shall be treated as a capital payment received by that person.

4 If the company is controlled by 2 or more persons (taking each one separately) at the time the payment is received, then—

a if one of them is then resident ... in the United Kingdom, it shall be treated as a capital payment received by that person;

b if 2 or more of them are then resident ... in the United Kingdom (“ the residents ”) it shall be treated as being as many equal capital payments as there are residents and each of them shall be treated as receiving one of the payments.

5 If the company is controlled by 2 or more persons (taking them together) at the time the payment is received ... —

a it shall be treated as being as many capital payments as there are participators in the company at the time it is received, and b each such participator (whatever his residence ... ) shall be treated as receiving one of the payments, quantified on the basis of a just and reasonable apportionment, but where (by virtue of the preceding provisions of this subsection and apart from this provision) a participator would be treated as receiving less than one-twentieth of the payment actually received by the company, he shall not be treated as receiving anything by virtue of this subsection.

6 For the purposes of subsection (1) above a qualifying company is a close company or a company which would be a close company if it were resident in the United Kingdom.

7 For the purposes of subsection (1) above a company is controlled by the trustees of a settlement if it is controlled by the trustees alone or by the trustees together with a person who (or persons each of whom) falls within subsection (8) below.

8 A person falls within this subsection if—

a he is a settlor in relation to the settlement, or b he is connected with a person falling within paragraph (a) above.

9 For the purposes of subsection (2) above a non-resident qualifying company is a company which is not resident in the United Kingdom and would be a close company if it were so resident. 9A For the purposes of this section an individual shall be deemed to have been resident in the United Kingdom at any time in any year of assessment for which he or she was not so resident if—

a section 1M applies to him or her, and b the year falls within the temporary period of non-residence. 9B If—

a it appears after the end of any year of assessment that any individual is to be treated by virtue of subsection (9A) above as having been resident in the United Kingdom at any time in that year, and b as a consequence, any adjustments fall to be made to the amounts of tax taken to have been chargeable by virtue of this section on any person, nothing in any enactment limiting the time for the making of any claim or assessment shall prevent the making of those adjustments (whether by means of an assessment, an amendment of an assessment, a repayment of tax or otherwise).

10 For the purposes of this section—

a the question whether a company is controlled by a person or persons shall be construed in accordance with sections 450 and 451 of CTA 2010 , but in deciding that question for those purposes no rights or powers of (or attributed to) an associate or associates of a person shall be attributed to him under section 451(4) to (6) of CTA 2010 if he is not a participator in the company; aa a person is not to be regarded as a participator in a company controlled by the trustees of a settlement where the person has a share or interest in the capital or income of the company solely by virtue of an interest which the person has under the settlement;

b “ participator ” has the meaning given by section 454 of CTA 2010 .

11 This section shall apply to payments received on or after 19th March 1991.