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Non-resident company.
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36.—(1) This section applies as respects chargeable gains accruing to a company—
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(a) which is not resident in the State, and
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(b) which would be a controlled company if it were resident in the State.
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(2) Subject to this section, every person who, at the time when the chargeable gain accrues to the company—
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(a) is resident or ordinarily resident in the State,
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(b) if an individual is domiciled in the State, and
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(c) holds shares in the company,
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shall be treated for the purposes of this Act as if a part of the chargeable gain had accrued to him.
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(3) That part of the chargeable gain shall be equal to the proportion of the assets of the company to which that person would be entitled on a liquidation of the company at the time when the chargeable gain accrues to the company.
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(4) This section shall not apply in relation to—
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(a) any amount in respect of the chargeable gain which is distributed, whether by way of dividend or distribution of capital or on the dissolution of the company, to persons holding shares in the company, or creditors of the company, within two years from the time when the chargeable gain accrued to the company,
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(b) a chargeable gain accruing on the disposal of assets, being tangible property, whether movable or immovable, or a lease of such property, where the property was used, and used only, for the purposes of a trade carried on by the company wholly outside the State,
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(c) a chargeable gain accruing on the disposal of currency or of a debt within section 46 (6) (foreign bank accounts), 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
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(d) a chargeable gain in respect of which the company is chargeable to tax by virtue of subsection (2) or (7) of section 4 (charge to tax on non-residents).
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(5) Subsection (4) (a) shall not prevent the making of an assessment in pursuance of this section, but if, by virtue of subsection (4) (a), this section is excluded, all such adjustments, whether by way of repayment or discharge of tax or otherwise, shall be made as will give effect to the provisions of subsection (4) (a).
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(6) The amount of capital gains tax paid by a person in pursuance of subsection (2) (so far as not reimbursed by the company) shall be allowable as a deduction in the computation, under this Act, of a gain accruing on the disposal by him of the shares by reference to which the tax was paid.
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(7) 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 so apply in relation to that person; and subject to the foregoing provisions of this subsection, this section shall not apply in relation to a loss accruing to the company.
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(8) If the person owning any of the shares in the company at the time when the chargeable gain accrues to the company is itself a company which is not resident in the State but which would be a controlled company if it were resident in the State, an amount equal to the amount apportioned under subsection (3) out of the chargeable gain to the shares so owned shall be apportioned among the issued shares of the second-mentioned company, and the holders of those shares shall be treated in accordance with subsection (2), and so on through any number of companies.
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(9) If any tax payable by any person by virtue of subsection (2) is paid by the company to which the chargeable gain accrues, or in a case under subsection (8) is paid by any such other company, the amount so paid shall not for the purposes of income tax, or for the purposes of this Act, be regarded as a payment to the person by whom the tax was originally payable.
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