Readers’ forum: Does permanent establishment exemption apply?

I have been having a debate with colleagues about whether the overseas permanent establishment (PE) exemption (CTA 2009 s 18A etc) covers exit charges on the overseas PE assets that arise when the UK company migrates (TCGA 1992 s 185).

It is clear that the overseas PE exemption election is automatically revoked when the UK company migrates (CTA 2009 s 18F(7)) but we don’t think that necessarily answers the question.

My initial instinct was that surely the overseas PE exemption must cover the migration exit charges on the overseas PE assets. My colleagues were not so sure.

Would an exit charge under s 185 be covered by the definition of ‘relevant profits amount’ in CTA 2009 s 18A(6) (and removed from charge under s 18B)? As an exit charge is a deemed disposal which arises in the UK company would it be attributable to...