ECJ – Recent Developments in Direct Taxation 2014

S. 236There are three cases concerning the UK that are discussed in this chapter. All of them are infringement actions and were previously discussed two years ago in the conference for that year. Since that time there has been a judgment in one of the cases, an Advocate General’s Opinion in another, and both domestic legislation, a related judgment and (subsequent to the conference) a judgment of the European Court in the third.

I. Commission v the UK (Attribution of Gains of Foreign Companies) – Case C-112/14: Judgment of 13 November 2014

This infringement action arose after a complaint to the Commission concerning s.13 of the Taxation of Chargeable Gains Act 1992 (“TCGA 1992” – which is consolidating legislation, replacing original legislation dating back to 1965). In general, the United Kingdom’s Capital Gains Tax Legislation does not impose a liability on non-residents; it would be relatively simple, therefore, to avoid the tax by having assets held by non-resident companies or non-resident trusts. In the case of companies, s.13 is an anti-avoidance measure designed to prevent this by automatically attributing any capital gains realized by closely held, non-resident companies to the pa...