Case – Implications of dual tax residence for a company

Introduction

Our client owns three UK companies and has recently moved overseas for the foreseeable future. Our client intends to run their business from another country and would like to understand the tax implications of doing business in the UK.

Issue

It is possible for a company to be resident in more than one country and if this is the case we need to review the Double Taxation Treaty (DTA) which should assign conventional residency to one of the jurisdictions. If a company loses its UK tax residence status, its assets will be deemed to have been disposed of for UK tax purposes.

How we solved it

We have provided an analysis of the UK tax consequences of our client’s companies losing their UK tax residence status and advised on the steps our client should take to ensure this does not happen. We have also advised on the impact of the DTA on our clients’ businesses if they remain UK tax resident and the associated reporting requirements.

The result

Our client was able to understand the steps necessary for their businesses to remain UK tax domiciles and avoid any adverse UK tax implications. Without this planning, our client may not have been aware of the deemed disposal rules for a business losing its UK tax residence status and could have faced a significant disposal for tax purposes.

Next steps

If you are considering moving abroad and wondering what the tax implications are for your UK business, contact us.