Hi,
Cayman Island company is shareholder in UK company.My question is:
1) Do we consider U.K. Company as local and file the CT600 tax return as the U.K. Company is doing business in local UK market or consider Non resident?
2) What would be Tax treatment of dividend to Cayman island company?
Replies (7)
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It's (relatively) complicated:
(1) http://www.wfw.com/wp-content/uploads/2015/11/WFW-AGuideToCorporateResid...
(2) Do you mean the UK tax treatment (answer, none) or Cayman tax treatment?
The UK registered company is UK resident. The UK's double tax treaty with the Cayman Islands (if it is in point) reinforces, rather than overrides that default position.
Advice will need to be taken in the Cayman Islands on the dividend. There are no UK tax issues.
The UK company is a separate entity. Its tax residence should be determined on the relevant facts regardless of the identity of the shareholder, so where it is managed and controlled etc (you may need to verify the beneficial owners of Cayman Co for your AML purposes and check transfer pricing, related party disclosures etc).
There is no UK withholding tax on dividends.