Determining a company’s residence status is crucial when considering its liability to UK tax. There are two important tests to consider when deciding a company’s residence: the Incorporation Test, and the Central Management and Control ("CMC") Test.
Incorporation Test
The incorporation test set out in 2009 CTA s.14 is simple; a company incorporated in the UK is regarded as resident in the UK for tax purposes.
If a company does not fall into this test, the second test must be considered.
“Central Management and Control” Test
The CMC test is derived from case law. As the name suggests, this test seeks to determine where the central management and control of the company vests.
This involves looking at where the orde...
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