Non resident company shareholding in U.K. Company

How to handle Tax matters of Non resident company as shareholder in U.K. Company

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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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By Accountant A
09th Nov 2016 17:13

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?

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By johngroganjga
09th Nov 2016 22:45

Who is your client -the UK company, the Cayman Island company, or both?

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Replying to johngroganjga:
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By @inforubina
10th Nov 2016 11:35

Hi, sorry for late reply.
My client is the UK company only.

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By Portia Nina Levin
09th Nov 2016 16:58

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.

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Replying to Portia Nina Levin:
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By @inforubina
10th Nov 2016 11:50

Hi
I'm only handing the UK resident company.
Cayman company is I think handled by local Cayman Accountant right now.

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By Matrix
09th Nov 2016 16:56

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.

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Replying to Matrix:
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By @inforubina
10th Nov 2016 11:47

The Uk company is separate entity and based in London.its all business activities and tax office are local. It has one working British director and one shareholder(Cayman company).I was only handling the local Uk company.i was only worried of the Cayman company shareholding status that I will disclose in related party disclosure of company accounts.
Many thanks for clarification.

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