What Is The Concept Of A Corporate Tax Residency?

Corporate tax residency is a concept used by the UK government to determine whether to treat businesses operating in the UK as residents on non-residents.

Which companies are treated as UK residents?

Generally, UK incorporated companies are treated as UK residents.

Additionally, companies incorporated overseas are also treated as UK resident provided their central management and control is situated in the UK.

The general rule of thumb, therefore, is that an incorporated company will be considered a tax resident if the place of highest form of control and direction over a company’s affairs (as opposed to day to day decision making of the business is in the UK.

Which Companies Are Not Treated As UK Residents?

For the purposes of UK domestic tax law, companies’ resident in the UK under domestic law but treated solely as residents in a different country under the Double Taxation Treaty with the UK are not treated as UK residents.

What Information Must The Newly Incorporated Companies Who Have Not Yet Filed A Corporation Tax Self-Assessment Tell The HMRC?

All such companies should tell the HMRC:

1. the name and address of each director and shareholder
2. the reason a company believes it is a resident of the UK (guidance is attached in the international manual at INTM120030)

How can Limited Companies or Partnership apply for a Certificate of Residence?

1. A limited company or partnership can apply for a Certificate of Residence by filling the RES1 form.

What information should the Limited Companies provide to fill this form?

The company needs to provide the following information to fill this form:

1. Address and Unique Tax Reference (UTR) of partnership or company
2. Reason for the certificate application
3. Type of income the certificate is required for
4. The past period for which the certificate is required
5. The ‘other country’ that requires the certificate
6. From the double tax treaty with the ‘other country’
7. The article number dealing with the type of income
8. Whether the income must be subject to tax or liable to tax

You will also need the company tax office ID, UTR, and an explanation stating why you believe the company is UK resident (if this is for a new company before its first Corporation Tax return is submitted)

The company form can be emailed to contactus.largebusinessscotlandandni@hmrc.gsi.gov.uk or posted to  MUID 854, Large Business S0862, HM Revenue & Customs, Newcastle Upon Tyne, NE98 1ZZ.

What information should Partnerships provide to fill this form?

If you are completing the form for partnership you must also have the following:

1. Full name, address, and UTR of the Managing Partner
2. Full names, titles, and residency status of all partners

The partnership form must be sent to

Pay As You Earn and Self-Assessment

HM Revenue and Customs

BX9 1AS

To learn more about Certificate of Residence, read our article on How to Apply for a Certificate of Residence

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