CTM34530 - Residence: dual resident companies: definition

A company is a dual resident company in any accounting period in which it is resident in the UK, under our central management and control test, if it is also within the charge to tax under the laws of a territory outside the UK by reason of certain conditions. It should be noted that 'territory' is a wider term than 'country' and encompasses a state or other political sub-division.

To be a dual resident company a company must be within the charge to tax in a territory because one of the following applies.

• It derives its status as a company under the general body of law in that territory. This covers countries that tax by reference to the place of incorporation, such as the United States and Australia.
• Its place of management is in that territory. This covers countries that regard a company as resident in a territory because of the location of the management or seat of business, such as Germany.
• It is regarded as resident for the purposes of the charge under the overseas law relating to taxation. This covers countries that tax on a basis similar to the UK test of central management and control, such as the Republic of Ireland.

Most dual resident companies claiming group relief were incorporated within the United States. Nevertheless the legislation is of general application. It is unlikely, however, that many dual resident companies that were not incorporated in the United States will come within its scope.