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European Commission v UK

In European Commission v UK (C-112/14 – 13 November 2014) the CJEU held that TCGA 1992 s 13 (before amendment) breached the principle of freedom of movement of capital.

The Commission was seeking a declaration by the CJEU that TCGA 1992 s 13 (prior to its amendment) – which attributes gains made by non-resident ‘close’ companies to their UK resident participators – infringed the principle of free movement of capital.

The Commission pointed out that the UK resident participators of a non-UK resident company were taxed immediately when the company disposed of assets and made a gain the tax being calculated by reference to the gain made by the company. However on a disposal by a UK company tax was charged only in the event of the distribution of the gains to participators or when they disposed of their shares on the basis of the...

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