When a company is UK tax resident
When a company is UK tax resident

The following Tax guidance note provides comprehensive and up to date legal information covering:

  • When a company is UK tax resident
  • The incorporation rule
  • Exception to the incorporation rule
  • Societas Europaea (SEs) and European Cooperative Societies (SCEs) can be tax resident in the UK
  • When is a company UK tax resident under UK case law?
  • Continued UK residence in cases where the company ceases to carry on business or goes into liquidation
  • What is the impact of being UK tax resident?
  • Can a company have multiple residencies for tax purposes?
  • HMRC’s approach

A company is UK tax resident if it is:

  1. incorporated in the UK (subject to exceptions), or

  2. centrally managed and controlled in the UK

provided it is not treated as resident outside the UK in accordance with a double tax treaty (ie provided it is not treaty non-resident).

The central management and control test is often referred to as CMC.

For information on treaty non-residence, see Practice Note: Tie breakers—when tax treaties impact on the UK tax residence of companies. For information on how to migrate a UK tax resident company from the UK, and the tax consequences of such a migration, see Practice Notes: Company migration or corporate inversion—how to change tax residence in practice and Consequences of company migration—UK exit charges and post-migration UK tax considerations.

It is important to know if a company is UK tax resident or not since that determines the extent to which the company is within the charge to UK corporation tax. A UK tax resident company is generally subject to UK corporation tax on its worldwide profits unless it has made a valid foreign branch exemption election under which the profits of any of its non-UK permanent establishments are exempt from UK corporation tax. For more information, see: What is the impact of being UK tax resident?

Even if a company is not UK tax resident, it can