Case-Dual tax residence implications for a company

Introduction

Our client owns three UK companies and recently moved abroad for the foreseeable future. Our client intends to run their companies from another country and wants to understand any UK corporation tax consequences of doing so.

Issue

It is possible for a company to be resident in more than one country and if this is the case, we need to review the double tax agreement (DTA) which should allocate treaty residence to one of the jurisdiction. If a company does lose it’s UK tax residence status, there will be a deemed disposal of its assets for UK tax purposes.

How we solved it

We provided an analysis of the UK tax consequences of our client’s companies losing their UK tax residence status and advised on the steps our client would need to take to ensure that this does not arise. We also advised on how the DTA would impact our client’s companies if they do remain UK tax resident and any associated reporting requirements.

The outcome

Our client was able to understand the steps necessary for their companies to remain UK tax residences and avoid any adverse UK tax implications. Without this planning, our client may not have been aware of the deemed disposal rules for a company losing it’s UK tax residence status and could have faced a large disposal for tax purposes.

Next Steps

If you are considering moving abroad and wondering what the tax implications are for your UK company then get in touch.