Since 1927 the leading authority on tax law, practice and administration

Subsidiary uncertainty

© Copyright LexisNexis 2024. All rights reserved.

15 December 2009

Issue: 4236 / Categories: Forum & Feedback

A UK subsidiary of a US parent is carrying out work in the UK on behalf of an offshore ‘sister’ company to whom all receipts are paid and all costs charged

A Ltd is a private limited company registered in the UK which is a wholly-owned subsidiary of a group whose ultimate parent is a US-based listed corporation.

A Ltd has been carrying out work in the UK on behalf of a sister company – another wholly-owned subsidiary but registered in the Isle of Man (IOM) – which has a contract with a UK company.

A Ltd has simply been utilised as a convenient but passive vehicle for carrying out the IOM company’s obligations under the contract with its UK customer. There is no arm’s length trading between the two.

The financing of our client company is partly on loan account and partly by inter-company invoicing (which does nothing more than recharge costs to the IOM company).

Once the IOM’s contract with its UK customer is finalised the client company will be wound up. It has not traded...

If you or your firm subscribes to Taxation.co.uk, please click the login box below:

If you are not a subscriber but are a registered user or have a free trial, please enter your details in the following boxes:

Subscribe Now...

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.

Once you have registered, you will receive an email directing you back to read this item in full.

Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.

Subsidiary uncertainty

© Copyright LexisNexis 2024. All rights reserved.

15 December 2009

A UK subsidiary of a US parent is carrying out work in the UK on behalf of an offshore ‘sister’ company to whom all receipts are paid and all costs charged

A Ltd is a private limited company registered in the UK which is a wholly-owned subsidiary of a group whose ultimate parent is a US-based listed corporation.

A Ltd has been carrying out work in the UK on behalf of a sister company – another wholly-owned subsidiary but registered in the Isle of Man (IOM) – which has a contract with a UK company.

A Ltd has simply been utilised as a convenient but passive vehicle for carrying out the IOM company’s obligations under the contract with its UK customer. There is no arm’s length trading between the two.

The financing of our client company is partly on loan account and partly by inter-company invoicing (which does nothing more than recharge costs to the IOM company).

Once the IOM’s contract with its UK customer is finalised the client company will be wound up. It has not traded...

If you or your firm subscribes to Taxation.co.uk, please click the login box below:

If you are not a subscriber but are a registered user or have a free trial, please enter your details in the following boxes:

Subscribe Now...

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.

Once you have registered, you will receive an email directing you back to read this item in full.

Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.

Issue:

4236

Categories: Forum & Feedback [1]

SourceURL:

Links:

READERS' FORUM premium icon

Tax tip: Work from home allowance Readers’ forum: Is there an alternative to using time apportionment? Readers’ forum: Tax liability on paying out distribution to members Readers’ forum: Should taxpayers submit form VAT652? Readers’ forum: Does option to tax on land also apply to buildings?

FIVE WAYS TO MAKE ACCOUNTS PRODUCTION AND TAX EASIER.
Download the exclusive Xero
free report here.

New queries

Please email any questions you might have
to: taxation@lexisnexis.co.uk.

NEWS

In brief: 25 July 2024 Movers and shakers: 25 July 2024 Agent update 121 available New power for the Office for Budget Responsibility Pressing tax issues need prioritising, says CIOT

Third slide

Deadline dates for August 2024

CASES

Rental income disclosure was unprompted Ignorance of the law is an excuse Clear winner but costs reduced for other factors Company was not resident in the US for treaty purposes Collagen-based drink was a beauty product

MOST POPULAR

Rental income disclosure was unprompted Ignorance of the law is an excuse Clear winner but costs reduced for other factors Company was not resident in the US for treaty purposes Collagen-based drink was a beauty product

back to top icon