What changed?
The attributed-gains rules apply to UK-resident participators holding an interest of more than 25% in a non-resident close company.
Draft Finance Bill 2026 provisions would allow the participation test to apply by reference to an individual protected cell as well as the company as a whole.
Practical consequence: UK-resident investors using non-UK protected cell companies should test ownership and gains at cell level for gains accruing on or after 28 October 2026.
What happened?
HMRC published a Budget 2026 measure on 28 October 2026 that would amend the UK rules attributing gains of non-resident close companies to UK-resident participators. For a protected cell company, the more-than-25% participation test could apply by reference to an individual cell as well as to the company as a whole.
Key details
Protected cell companies segregate assets and liabilities among identifiable cells. Under current sections 3 to 3G of the Taxation of Chargeable Gains Act 1992, gains of a non-resident close company can be attributed to UK-resident participators holding an interest of more than 25%. The draft Finance Bill provisions would treat relevant cells within this framework and amend associated attribution and double-taxation provisions. This is draft legislation; publication of the measure is not enactment.
Who is affected?
UK-resident individuals, trustees and companies holding assets through a non-UK resident protected cell company should review whether an interest exceeds the threshold at cell level. Structures involving insurance, investment or fund cells may require fact-specific analysis, but the official measure does not say that every protected-cell arrangement is within scope.