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590 Attribution to participators of chargeable gains accruing to non-resident company.

(1) In this section—

(a) “participator”, in relation to a company, has the meaning assigned to it by section 433(1);

(b) references to a person’s interest as a participator in a company are references to the interest in the company which is represented by all the factors by reference to which the person falls to be treated as such a participator; and

(c) references to the extent of such an interest are references to the proportion of the interests as participators of all the participators in the company (including any who are not resident or ordinarily resident in the State) which on a just and reasonable apportionment is represented by that interest.

(2) For the purposes of this section, where—

(a) the interest of any person in a company is wholly or partly represented by an interest (in this subsection referred to as the “person’s beneficial interest”) which the person has under any settlement, and

(b) the person’s beneficial interest is the factor, or one of the factors, by reference to which the person would be treated, apart from this subsection, as having an interest as a participator in the company,

the interest as a participator in the company which would be that person’s shall be deemed, to the extent that it is represented by the person’s beneficial interest, to be an interest of the trustees of the settlement, and not an interest of the person’s, and references in this section, in relation to a company, to a participator shall be construed accordingly.

(3) This section shall apply as respects chargeable gains accruing to a company—

(a) which is not resident in the State, and

(b) which would be a close company if it were resident in the State.

(4) Subject to this section, every person who at the time when the chargeable gain accrues to the company is resident or ordinarily resident in the State, who, if an individual, is domiciled in the State, and who is a participator in the company, shall be treated for the purposes of the Capital Gains Tax Acts as if a part of the chargeable gain had accrued to that person.

(5) The part of the chargeable gain referred to in subsection (4) shall be equal to the proportion of that gain that corresponds to the extent of the participator’s interest as a participator in the company.

(6) Subsection (4) shall not apply in the case of any participator in the company to which the gain accrues where the aggregate amount falling under that subsection to be apportioned to the participator and to persons connected with the participator does not exceed one-twentieth of the gain.

(7) This section shall not apply in relation to—

(b) a chargeable gain accruing on the disposal of currency or of a debt within section 541(6), where the currency or debt is or represents money in use for the purposes of a trade carried on by the company wholly outside the State, or

(c) a chargeable gain in respect of which the company is chargeable to capital gains tax by virtue of section 29 or to corporation tax by virtue of section 25(2)(b).

(8) Where—

(a) any amount of capital gains tax is paid by a person in pursuance of subsection (4), and

(b) an amount in respect of the chargeable gain is distributed, whether by way of dividend or distribution of capital or on the dissolution of the company, within 2 years from the time when the chargeable gain accrued to the company,

that amount of tax, so far as neither reimbursed by the company nor applied as a deduction under subsection (9), shall be applied for reducing or extinguishing any liability of the person to income tax in respect of the distribution or (in the case of a distribution falling to be treated as a disposal on which a chargeable gain accrues to the person) to any capital gains tax in respect of the distribution.

(9) The amount of capital gains tax paid by a person in pursuance of subsection (4), so far as neither reimbursed by the company nor applied under subsection (8) for reducing any liability to tax, shall be allowable as a deduction in the computation under the Capital Gains Tax Acts of a gain accruing on the disposal by the person of any asset representing the person’s interest as a participator in the company.

(10) In ascertaining for the purposes of subsection (8) the amount of income tax chargeable on any person for any year of assessment on or in respect of a distribution, any such distribution mentioned in that subsection which falls to be treated as income of that person for that year of assessment shall be regarded as forming the highest part of the income on which the person is charged to tax for the year of assessment.

(11) To the extent that it would reduce or extinguish chargeable gains accruing by virtue of this section to a person in a year of assessment, this section shall apply in relation to a loss accruing to the company on the disposal of an asset in that year of assessment as it would apply if a gain instead of a loss had accrued to the company on the disposal, but shall only apply in relation to that person; and, subject to the preceding provisions of this subsection, this section shall not apply in relation to a loss accruing to the company.

(12) Where the person who is a participator in the company at the time when the chargeable gain accrued to the company is itself a company which is not resident in the State but which would be a close company if it were resident in the State, an amount equal to the amount apportioned under subsection (5) out of the chargeable gain to the participating company’s interest as a participator in the company to which the gain accrues shall be further apportioned among the participators in the participating company according to the extent of their respective interests as participators, and subsection (4) shall apply to them accordingly in relation to the amounts further apportioned, and so on through any number of companies.

(13) The persons treated by this section as if a part of a chargeable gain accruing to a company had accrued to them shall include trustees who are participators in the company, or in any company amongst the participators in which the gain is apportioned under subsection (12), if when the gain accrued to the company the trustees are neither resident nor ordinarily resident in the State.

(14) Where any tax payable by any person by virtue of subsection (4) is paid by the company to which the chargeable gain accrues, or in a case under subsection (12) is paid by any such other company, the amount so paid shall not, for the purposes of income tax, capital gains tax or corporation tax, be regarded as a payment to the person by whom the tax was originally payable.

(15) For the purposes of this section, the amount of the gain or loss accruing at any time to a company which is not resident in the State shall be computed (where it is not the case) as if the company were within the charge to corporation tax on capital gains.

(16) (a) In this subsection—

“group” shall be construed in accordance with subsections (1) (excluding paragraph (a)), (3) and (4) of section 616;

“non-resident group” of companies—

(i) in the case of a group none of the members of which is resident in the State, means that group, and

(ii) in the case of a group 2 or more members of which are not resident in the State, means the members not resident in the State.

(b) For the purposes of this section—

(i) ^[2]>sections 617 to 620^{<[2] [2]>} section 617 (other than paragraphs (b) and (c) of subsection (1)), section 618 (with the omission of the words “to which this section applies” in subsections (1)(a) and (2), of “such” in subsection (1)(c) and of subsection (3)), section 619(2) (with the substitution for “in the course of a disposal to which section 617 applies” of “at a time when both were members of the group”) and section 620(2) (with the omission of the words “to which this section applies”)^<[2] shall apply in relation to non-resident companies which are members of a non-resident group of companies as they apply in relation to companies resident in the State which are members of a group of companies, and

(ii) sections 623^[3]> (apart from paragraphs (c) and (d) of subsection (2))^<[3] and 625 shall apply as if for any reference in those sections to a group of companies there were substituted a reference to a non-resident group of companies, and as if references to companies were references to companies not resident in the State.

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