The following Tax guidance note Produced in partnership with Robert Langston of Saffery Champness provides comprehensive and up to date legal information covering:
It is necessary to characterise overseas entities for UK tax purposes, as this will determine how they (and their members and potentially other persons connected with them) are taxed. Broadly speaking, an entity may be:
transparent—which means, that it is treated like a partnership or certain types of trust for UK tax purposes (hence not a taxable person in its own right, at least from a direct tax perspective) and its profits are typically taxed on its UK members as they arise and whether or not they are distributed, or
opaque—which means, broadly, that it is treated like a company for UK tax purposes (hence a taxable person in its own right) and its profits are typically not taxed in the UK until distributed to its members
It is also necessary to characterise distributions received from an opaque overseas entity (as either income or capital) as this will determine how they are taxed in the hands of a UK recipient. Not all distributions from an opaque overseas entity will be taxable as dividends. For further details, see Practice Note: UK tax implications of overseas entity classification and distributions from overseas entities.
If an entity is treated as opaque, it will also be relevant for the purposes of certain UK tax reliefs whether or not the entity is treated as having ordinary share capital;
**Trials are provided to all LexisPSL and LexisLibrary content, excluding Practice Compliance, Practice Management and Risk and Compliance, subscription packages are tailored to your specific needs. To discuss trialling these LexisPSL services please email customer service via our online form. Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason. Trial includes one question to LexisAsk during the length of the trial.
To view the latest version of this document and thousands of others like it, sign-in to LexisPSL or register for a free trial.
Existing user? Sign-in
Take a free trial
0330 161 1234
To view our latest legal guidance content,sign-in to Lexis®PSL or register for a free trial.