Company migration or corporate inversion—how to change tax residence in practice
Produced in partnership with Robert Langston of Saffery Champness
Company migration or corporate inversion—how to change tax residence in practice

The following Tax guidance note Produced in partnership with Robert Langston of Saffery Champness provides comprehensive and up to date legal information covering:

  • Company migration or corporate inversion—how to change tax residence in practice
  • Direct emigration of a UK tax resident company
  • Direct emigration—UK exit charges and obligation to notify HMRC
  • Direct emigration and interaction with the CFC rules
  • Corporate inversion of a group of companies with a UK parent
  • Redomiciliation
  • Migrating to the UK

Migration refers to the transfer by a company of its tax residence from one jurisdiction to another. This may be done for a number of reasons. Historically, many companies migrated overseas as a way of escaping the burden of UK taxation and taking advantage of lower tax rates. This is now less of a driver given low UK corporation tax rates and exemptions for dividends and certain chargeable gains, as well as the introduction of revised controlled foreign company rules which are less onerous than the predecessor regime.

Alternatively, commercial factors may require a company to be incorporated in the UK but be tax resident in another country, for example owing to all the directors living in that country.

For an explanation and comparison of the considerations when choosing a tax jurisdiction in which to locate the holding company of a corporate group, see Practice Note: How to choose a holding company jurisdiction.

In practice, there are different ways in which a UK tax resident company (or group of companies) might migrate from the UK (or reorganise itself so as to achieve a similar result from a tax perspective). As explained further below, these include:

  1. direct emigration—where a UK tax resident company shifts its tax residence outside of the UK, and

  2. corporate inversion—where a new, non-UK resident, holding company is inserted above the

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