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Coddan CPM Ltd. – Company Registration Agent in the UK
Home Limited Companies Advantages of UK Tax Resident Company Tax Resident Company Start-Up and Taxation in the UK

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Tax resident entity start-up and taxation in the United Kingdom

 
Tax Resident Company Start-Up

Tax resident entity start-up and taxation in the United Kingdom - a limited company is found to be UK tax resident when it fulfils at least one of the following circumstances: it is incorporated in the UK and it is centrally managed and controlled in the UK. British tax resident companies are subject to corporation tax on all chargeable profits worldwide, except in circumstances where they may be taxed twice (see below).

Dual residence companies: in some circumstances, limited companies may be considered to have dual residence. This is where they may fulfil the terms of being either registered in the UK or managed centrally in the United Kingdom, but where they are also considered to be resident in another country. An example of this is when a private company was registered in another country, but is controlled centrally in the Great Britain.

If the company limited by shares is found to be tax resident in two countries, it will not be double taxed. Instead, the two states will have in place a way of working out which country should be in receipt of your private company's corporation tax. One thing to note, is that the ways in which different countries allocate residence, are not the same. So, although the United Kingdom may apply residence to any company that is either incorporated or controlled centrally from England, Wales, Scotland or North of Ireland, the criteria around the same subject for other countries may be different.

If the other country is a tax treaty partner to the UK, a tie-breaker test is applied to establish which country should receive the taxes from that limited company. Where it is found that the residence should be awarded to the treaty partner country, the company is referred to as being 'treaty non-resident'.

How Coddan can help with the details of a tax resident company start-up: if you are unsure about where your company stands on local corporation tax, or believe that you may have a case to be considered a treaty non-resident corporation, please call our business advisers on 033 0808 0089 or +44 (0) 207 935 5171. We have a great deal of experience in dealing with intricate tax issues, and are confident that if your company should not be subject to UK corporation tax, we will be able to identify the exact issues and advise you accordingly.