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