INTM120040 - Company Residence
Company residence: the incorporation rule
FA88/S66 and FA88/SCH7
The incorporation rule at FA94/S66(1) & (4) states that,
with certain exceptions, a UK incorporated company is resident in
the UK for tax purposes.
Carried or carrying on business
The term 'carried' or 'carrying on business' is not defined
in Schedule 7 but paragraphs 3 to 5 of SP1/90 (which is reproduced
at
INTM120140) give guidance on its
meaning. See also
INTM120050 regarding shelf companies
and nowhere companies.
Submit doubtful cases to CT & VAT, International CT.
Taxable in a territory outside the UK
The term ' taxable in a territory outside the UK' means,
according to the definition of 'taxable' in Schedule 7, paragraph
5(1), liable to tax on income in that territory by reason of
domicile, residence or place of management. Paragraphs 6 and 7 of
SP1/90 (which is reproduced at
INTM120140) give guidance on the
meaning of these terms.
There is a similar test in the rules for determining
residence for the purpose of the controlled foreign companies
provisions and the guidance at
INTM202050 may be relevant. This
guidance contains an explanation of the test, in the discussion of
territory of residence and a description of countries which do not,
or may not, impose tax by reason of domicile, residence or place of
management (see discussion of companies with no territory of
residence).
Some companies may clearly fulfil the condition, for example,
a company which can show that
- its place of management, for example, its Head Office, is in a country which, at least in principle, taxes companies incorporated in the country on their worldwide income
and
- the company is taxed there on the same basis as a company incorporated there.
Submit doubtful cases to CT & VAT, International CT.
UK incorporated company claiming to be UK non-resident other than by the operation of a treaty
You should submit any case where a UK incorporated company claims to be UK non-resident other than by the operation of a treaty to CT & VAT, International CT.
