COM40080 - Case records: setting up case records: treaty non-resident companies
Who deals with Treaty Non-Resident Companies?
Amending the COTAX record for a Treaty Non-Resident company
Background
A company which is resident in the UK under either the case law rule or the incorporation rule may also be resident in an overseas country for tax purposes by reason of that country's domestic law.
For more detailed information about the case law rule and the incorporation rule, see the International Manual at INTM120060 and INTM120040.
Where a company is resident both in the UK and in another country, it is ‘dual resident’.
Where a company is
- Dual resident
- There is a Double Taxation Agreement (DTA) between the UK and the other country containing a residence tie-breaker for companies
- Under that tie-breaker, residence is awarded to the other country
- The company is called 'treaty non-resident'.
For more detailed information about dual residency and treaty non-residency, see the International Manual at INTM120070 onwards and the Company Taxation Manual at CTM34500 onwards.
Who deals with Treaty Non-Resident Companies?
A claim for treaty non-resident status may be received by any office for a company incorporated in the United Kingdom and already set up on COTAX.
The Collective Investments Schemes Centre (Fronting Unit) in Sheffield was set up to deal with singleton and associated, UK-incorporated, treaty non-resident companies (also know as ‘fronting companies’). It currently handles about 50% of such entities.
It’s difficult to recognise a potential treaty non-resident company on incorporation and the company usually has to make a claim under a relevant DTA agreement before we can identify it as potentially treaty non-resident.
If you receive a claim from a UK-incorporated company that it is treaty non-resident and it is not a member of a group
- Please transfer the case to the Sheffield Unit.
Where the claimant company is a member of a group it should be dealt with by the office which is responsible for the group.
Amending the COTAX record for a Treaty Non-Resident company
If you work in an office that should be dealing with a UK-incorporated, treaty non-resident company
- You will need to amend the COTAX record when the company has made a successful claim for treaty non-resident status.
A Technical Caseworker will give you the name of the treaty non-resident company together with the date that the company became treaty non-resident. You should also be told whether the company should be transferred to the Sheffield Unit.
When you receive notification of a new treaty non-resident company
- Use Function ACTP (Amend CT Payer Details) and change the company status to ‘T’
- Use Function MAPD (Maintain AP Dates) to make all accounting periods ‘exempt’ from the date that the company became treaty non-resident. See COM1081 which explains how to record ‘exempt’ periods.
