The European Court of Justice on November 13 ruled that UK legislation that immediately attributes gains made by non-resident closely held companies to participators of the companies that are UK residents is a restriction on the free movement of capital as defined in Article 63 TFEU and Article 40 of the Agreement on the European Economic Area of 2 May 1992
The UK legislation, Section 13 of the Taxation of Chargeable Gains Act 1992, is not justified by the legitimate interest of combating tax avoidance because it goes beyond what is necessary for attaining that objective, the court concluded.
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