Resident in the UK

Laerstate BV was incorporated in the Netherlands. Its controlling director for the period 1993 to August 1996 was a German national Mr Bock who was resident in the UK. He resigned in 1996 leaving Mr Trapman as sole remaining director.

HMRC assessed the company to corporation tax for the years 1993 to 1996. They claimed that the company was resident in the UK during this time.

The company appealed claiming that it was not UK resident.

The tribunal judges said that the legal test for corporate residence was as decided by the Lord-Chancellor in De Beers Consolidated Mines Ltd v Howe 5 TC 198: ‘the real business is carried on where the central management and control actually abides’.

This does not necessarily have to be where the directors meet but is a question of fact.

Applying the law to the facts of the instant case...