Corporate migration

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 although the actual transfer by a company of its residence is rare, not least because it can be complicated from a tax perspective. Historically, many companies migrated overseas as a way of escaping the burden of UK taxation and taking advantage of lower tax rates and other related benefits such as the absence of controlled foreign company (CFC) provisions (for which see: CFC rules—overview). Alternatively, commercial factors may require a company to be incorporated in the UK but be tax resident in another country, for example due to all the directors living in that country. Recently, because of favourable changes in UK tax law, some companies have chosen to migrate their tax residence to the UK.

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: Holding company jurisdictions—tax considerations.

In practice, there are different ways in which a UK tax resident company