International Tax Planning: UK Companies and Partnerships, 5th Edition

Preface 
Acknowledgements 
Table of Cases 
Table of Statutes 
Table of Statutory Instruments 
Table of International and Foreign Material 
List of Abbreviations 

UK Companies and Partnerships: An Introduction to their UK Tax Liabilities, the Limits of UK Tax Liabilities, and Use of UK Double Tax Treaties

• Definitions
• • The foreign withholding tax criterion
  • The local taxation criterion
  • The domestic withholding tax criterion
  • The capital gains exemption
• The world’s leading IHC locations
• • The United Kingdom as an IHC location

The Impact of EU Law on International Tax Planning Using UK Companies and Partnerships

• Mitigating foreign withholding tax
• • Relief under a double tax treaty
  • • (a) Scope of treaty relief: the issue of residence
    • (b) Taxation of dividends in the country of source
    • Article 10 and the EC Parent/Subsidiary Directive
    • Double tax treaties and conflicting domestic law
    • Article 10
    • The importance of beneficial ownership
    • Nominees and conduit companies
    • Foreign withholding taxes
    • (c) Comparative table of withholding tax rates
  • Relief under Directive 90/435: the EC Parent/Subsidiary Directive
  • • a) Domestic anti-avoidance provisions
    • Beneficial ownership
    • Minimum participating requirement and qualification periods
    • The Denkavit case
    • Post-Denkavit
    • (b) Requirements for control of the parent within the EU
• Conclusion
• • Unilateral relief

UK International Holding Companies and Foreign Dividend Income: the Exemption Regime

• Introduction
• Small companies
• Medium-sized and large companies
• • The UK company controls the dividend-paying company: s 931E of the CTA 2009
  • Non-redeemable ordinary shares: s 931F
  • Portfolio shareholdings: s 931G
  • Dividends paid in respect of relevant profits: s 931I
  • Dividends similar to interest
• Election for a foreign dividend not to be exempt
• Debt cap
• Where the exemption does not apply: the foreign tax credit rules
• • Corporation tax
  • Relief from double taxation
  • • (a) Unilateral relief
    • The mixer cap
    • Ownership threshold for credit relief
    • Preserving foreign tax credits
    • (b) Credit relief under the terms of a double tax treaty
    • (c) Credit relief under the terms of the EC Parent/Subsidiary Directive
  • Tax-sparing relief

Company Residence 

• Residence and treaty protection
• Domestic law considerations
• • UK-incorporated parent companies
  • Offshore companies and the EC Parent/Subsidiary Directive
• Treaty law and Corporation Tax Act 2009, s 18
• • OECD model tie-breaker clause
  • The dangers of s 18 for UK IHCs
• Central management and control and place of effective management
• • Central management and control
  • • Wood v Holden
    • • Company residence
      • The taxpayer’s argument
      • HMRC’s argument
      • First instance decision
      • Appeal to the High Court
      • Court of Appeal judgment
      • Conclusions from Wood v Holden
  • Place of effective management
  • • The Wensleydale case
• Conclusion

The Corporation Tax Exemption for Capital Gains 

• Introduction
• Meaning of ‘substantial shareholding’
• • The qualifying period
• UK IHC status requirements: sole trading company or member of trading group
• • Sole trading company
  • • (a) What is a trading company?
    • (b) The concept of a trade
    • One-off transactions
    • Activities related to trade
    • Subject matter
    • Modus operandi
    • Finance
    • Fabrication
    • Resale in whole or in lots
    • Intention
    • Memorandum of company
    • Pride of possession
    • HMRC interpretation
  • Meaning of the word ‘substantial’
  • The company’s trading history
  • The extensive scope of the meaning of the term ‘trading activities’
  • • Investment activity
    • Seeking new acquisitions
    • Evaluating potential acquisitions
    • Business plans
    • Paying dividends
  • Member of a trading group
  • • (a) What is a group?
    • (b) What is a trading group?
    • (c) Trading activities
• Status requirements of the investee company
• • Trading company
  • Holding company of a trading group or sub-group
  • • Trading sub-groups
  • The qualifying period and the time immediately after disposal
  • Ownership of the UK IHC
  • Treatment of holdings in joint venture companies
• Case studies and commentary
• • Case Study 1
  • • Comment
    • Scope of the definition of trading activities in Sch 7AC
    • Meaning of ‘significant interest’
  • Case Study 2
  • • Comment
  • Case Study 3
  • • Comment
  • Case Study 4
  • • Comment
  • Case Study 5
  • • Comment
  • Case Study 6
  • • Comment
    • • Investing company unable to fulfil status requirements immediately after disposal
  • Case Study 7
  • Aggregation of holding
  • Group re-organisation
  • • Background
    • Objectives
    • • Stage 1
      • Stage 2
    • Substantial shareholder exemption
  • Joint venture companies and the subsidiary exemption rule
• Conclusion

Anti-Avoidance Issues 

• Introduction
• Anti-avoidance rules pertaining to the substantial shareholdings exemption
• • Limitations of TCGA 1992, Sch 7AC, para 5
  • Goodwill not to be regarded as untaxed profits
  • The ‘sole or main benefit’ rule
• Treaty provisions (anti-avoidance or anti-abuse rules)
• • Anti-avoidance provisions in double tax treaties
  • • UK/US treaty
• Controlled foreign companies legislation
• • Resident outside the UK
  • Controlled by persons resident in the UK
  • Lower level of taxation
  • The charge to tax
• CFCs resident and established in the EU
• Overseas CFCs resident and established outside the EU
• Conclusion

Beyond UK Holding Companies: Other Uses of UK Companies (and UK Limited Partnerships ) in International Tax Planning

• Tax–efficient trading companies
• UK nominee companies
• Bank accounts
• UK nominee company commission payments
• UK service companies
• VAT
• Triangular trading
• Accounting issues
• Appearance and reality
• Tax issues
• UK trading companies
• • UK trading sub-contractors
  • UK sub-contractor companies
  • Exemption from UK transfer pricing rules
  • Aggregation of staff, turnover and balance sheet total
  • Accounting and VAT issues
• UK royalty companies
  • UK treaty relief for foreign withholding taxes
  • Achieving reductions in foreign withholding tax under the double tax treaty
  • Avoiding UK withholding tax
• UK corporation tax relief
• UK registered non-resident companies
• • UK-registered companies dual-resident in Cyprus
  • Residence under Cyprus law
  • Residence in Cyprus under treaty law ie under the UK/Cyprus double tax treaty
  • UK tax compliance issues affecting UK non-resident companies
• UK limited liability partnerships
• • Taxation of an LLP and its non-UK resident members
  • Management and control issues
  • Trading within or outside the UK
  • Non-UK resident trustees as members of an LLP: are the LLP interests owned by such trustees UK-situated assets for UK inheritance tax purposes?
  • Potential loss of UK tax transparency
  • Double taxation relief
  • VAT
  • Characterisation of UK LLPs in overseas countries
  • Accounts
• Limited partnerships
• • Accounts requirements of limited partnerships
  • • Partnerships and Unlimited Companies (Accounts) Regulations 1993
    • Offshore general partners
    • Avoiding the requirements of the Partnership and Unlimited Companies (Accounts) Regulations 1993
  • Alternative solutions
• UK companies as ‘offshore discretionary trustees’
• • Corporate residence of Jersey trustee
• Conclusion

The BEPS Action Plan 6: Treaty Planning in the New Era: Some Observations

UK Companies and Beneficial Ownership Disclosure: the PSC Register

UK Company and Partnership Formation and Statutory Administration 

Appendix 1
Corporation Tax Act 2009 

Appendix 2
Taxation of Chargeable Gains Act 1992 

Appendix 3
Specimen Articles of Association for a UK International Holding Company 

Index