This article gives an overview into Company Residency Status.
Why company residency is important?
A company which is resident in the UK is normally subject to corporation tax on the whole of its chargeable profits on a worldwide basis (subject to relief for double taxation).
A company which is not resident in the UK is only liable to corporation tax if it carries on a trade in the UK through a permanent establishment.
What are the conditions of the company being UK resident?
A company is resident in the UK for the purposes of the Taxes Acts if:
it is incorporated in the UK or
the central management and control of its business is in the UK.
Default Status of Residence
The incorporation rule at CTA09/S14 states that, with certain exceptions, a UK incorporated company is resident in the UK for tax purposes.
Exception to the Default Status of Incorporation Rule
UK incorporated companies which qualify for exception to the incorporation rule, so long as their place of central management and control is outside the UK.
What if the company has no place of residence for tax purposes?
If the company has no place of residence, then it will be regarded as UK tax resident, as it was decided in Union Corporation Ltd v CIR (1953).
Overseas Residency
The implication of overseas residency status is involved and you should seek professional advice.
Basically, if the company is held to have an overseas residency status, it may not be taxable in the UK, subject to any double taxation treaties between UK and the country in which the company is deemed to be resident.
If the company is not resident anywhere in the world, see default status above.
