Section 190: Tax recoverable from another group company or controlling director., Taxation of Chargeable Gains Act 1992

This section applies where—

a chargeable gain has accrued to a company ("the taxpayer company"),

the condition in subsection (2) below is met, and

the whole or part of the corporation tax assessed on the company for the accounting period in which the gain accrued ("the relevant accounting period") is unpaid at the end of the period of six months after it became payable.

The condition referred to in subsection (1)(b) above is—

that the taxpayer company is resident in the United Kingdom at the time when the gain accrued, or

that the gain is chargeable to corporation tax as a result of section 2B(3) or (4).

The following persons may, by notice under this section, be required to pay the unpaid tax—

if the taxpayer company was a member of a group at the time when the gain accrued—

a company which was at that time the principal company of the group, and

any other company which in any part of the period of twelve months ending with that time was a member of that group and owned the asset disposed of, or any part of it, or where that asset is an interest or right in or over another asset, owned either asset or any part of either asset; and

if the taxpayer company was not resident in the United Kingdom at the time when the gain accrued, any person who is, or during the period of twelve months ending with the time when the gain accrued was, a controlling director of the taxpayer company or of a company which has, or within that period had, control over the taxpayer company.

The Board may serve a notice on a person within subsection (3) above requiring him, within 30 days of the service of the notice, to pay—

the amount which remains unpaid of the corporation tax assessed on the taxpayer company for the relevant accounting period, or

if less, an amount equal to corporation tax on the amount of the chargeable gain at the rate in force when the gain accrued.

The notice must state—

the amount of corporation tax assessed on the taxpayer company for the relevant accounting period that remains unpaid,

the date when it first became payable, and

the amount required to be paid by the person on whom the notice is served.

The notice has effect—

for the purposes of the recovery from that person of the amount required to be paid and of interest on that amount, and

for the purposes of appeals,

as if it were a notice of assessment and that amount were an amount of tax due from that person.

Any notice under this section must be served before the end of the period of three years beginning with the date on which the liability of the taxpayer company to corporation tax for the relevant accounting period is finally determined.

Where the unpaid tax is charged in consequence of a determination under paragraph 36 or 37 of Schedule 18 to the Finance Act 1998 (determination where no return delivered or return incomplete), the date mentioned in subsection (7) above shall be taken to be the date on which the determination was made.

Where the unpaid tax is charged in a self-assessment, including a self-assessment that supersedes a determination (see paragraph 40 of Schedule 18 to the Finance Act 1998), the date mentioned in subsection (7) above shall be taken to be the latest of—

the last date on which notice of enquiry may be given into the return containing the self-assessment;

if notice of enquiry is given, 30 days after the enquiry is completed;

if more than one notice of enquiry is given, 30 days after the last notice of completion;

if after such an enquiry the Inland Revenue amend the return, 30 days after notice of the amendment is issued;

if an appeal is brought against such an amendment, 30 days after the appeal is finally determined.

If the unpaid tax is charged in a discovery assessment, the date mentioned in subsection (7) above shall be taken to be—

where there is no appeal against the assessment, the date when the tax becomes due and payable;

where there is such an appeal, the date on which the appeal is finally determined.

A person who has paid an amount in pursuance of a notice under this section may recover that amount from the taxpayer company.

A payment in pursuance of a notice under this section is not allowed as a deduction in computing any income, profits or losses for any tax purposes.

In this section—

"director", in relation to a company, has the meaning given by section 67(1) and (2) of ITEPA 2003 and includes any person falling within section 452(1) of CTA 2010;
"controlling director", in relation to a company, means a director of the company who has control of it (construing control in accordance with sections 450 and 451 of CTA 2010); "group" and "principal company" have the meaning which would be given by section 170 if in that section for references to 75 per cent. subsidiaries there were substituted references to 51 per cent. subsidiaries.

Section 190: Tax recoverable from another group company or controlling director.

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