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Upper tribunal ruling on determining corporate residence

25 June 2019 / David Hughes , Helena Kanczula
Issue: 4701 / Categories: Comment & Analysis
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 ( that three Jersey incorporated subsidiaries of the Development Securities Group (DSG) had always been UK tax...

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