B2.125 Branch or agency

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–D4.127

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