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Corporate residence
Key points
- The Upper Tribunal overturns a decision on corporate residence and reaffirms key principles.
- To create losses three Jersey companies were needed and had to be non-resident for a short period.
- Corporate residence depends on where the company’s central management and control is located.
- The general principle is that a company is resident in the jurisdiction where its board of directors meets.
- SPVs may only have limited functions to perform but nevertheless are principals not mere nominees or agents.
- Does a parent company have control or only influence.
- The duties of the directors and their responsibilities must be taken into account.
A tax case relating to corporate residence is still a relatively rare occurrence and therefore the principles derived from any new hearings are hotly anticipated. The First-tier Tribunal’s finding of 14 July 2017 (tinyurl.com/y27nmcw7) that three Jersey incorporated subsidiaries of the Development Securities Group (DSG) had always been UK tax...
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