Commentary

B2.125 Branch or agency

Business tax
Business tax | Commentary

B2.125 Branch or agency

Business tax | Commentary

Non-residents trading in the UK

B2.125 Branch or agency

Where a non-UK resident person trades in the UK (whether solely or in partnership) through a branch or agency, the branch or agency is, for income tax purposes only, the 'UK representative' of the non resident1. There are some exclusions to this rule which apply, broadly, if the UK representative is truly independent from the non–UK resident person (see below).

This rule applies to individuals. It only applies to companies to the extent that the income accrues to it in the capacity of trustee2. For the rules that apply to companies and permanent establishments, see D4.115–D4.128

The branch is treated as the UK representative in relation to:

  1.  

    •     income from the trade, profession or vocation arising directly or indirectly from the branch or agency3

  2.  

    •     income from property or rights (such as patents, copyright etc) which are used or held by the branch or agency4, and

  3.  

    •     capital gains on assets situated in the UK used for the purposes of a trade, profession or vocation or by the branch or agency (see C1.602)5.

A branch or agency is defined as any factorship, agency, receivership, branch or management6.

Where the rules apply, the branch or agency is liable to tax in the usual manner as if it were UK resident subject to the following rules7:

  1.  

    •     Rule 1 — The UK representative in relation to any amount remains the representative in relation to that amount, even after ceasing to be the branch or agency

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