Determining whether your company is classified as a non-UK resident involves analyzing certain criteria established by UK tax authorities. Typically, a company is considered a UK resident for tax purposes if it is incorporated in the UK or if its place of central management and control is situated within the UK, also known as the “central management and control test.”
To assess your company’s residency status, consider the following:
Incorporation: If your company was incorporated in the UK, it is likely considered a UK resident, irrespective of where its management and control occur.
Central Management and Control: This criterion evaluates where key management and commercial decisions are made. If these decisions are primarily executed outside the UK, your company might be classified as a non-UK resident. Key factors include the location where board meetings are held, where directors reside, and where strategic business decisions are executed.
Treaty Provisions: Double taxation agreements between the UK and other countries can also influence residency status. These treaties can override domestic rules, favoring residence in one country over another under specific conditions.
Case Law and Guidance: Historical case law and HMRC guidance provide additional insights into how residence is determined in practical scenarios.
It’s crucial to carefully evaluate these aspects and consider obtaining legal or tax advisory services to ensure accurate status determination and avoid unanticipated tax liabilities.