Share this content

US Subsidiary

UK based company is opening a subsidiary in US

Didn't find your answer?

Hi All

One of my UK based client is in the process of opening a subsidiary in US and hopefully it will be in operation by the end of this month.I have a question regarding consolidated accounts. Do we have to include US subsidiary accounts to UK Consolidated accounts for filing and paying Corporationton tax to HMRC?Or US subsidiary will file and pay Corporation Tax in US?Is there any tax treaty arrangement between UK and US?

Also we need tax advisory service with tax specialist once a quarter for our  same client.Who do you recommend to advice the client regarding their personal and company taxes.

Replies (12)

Please login or register to join the discussion.

By johngroganjga
03rd Nov 2021 10:44

You are getting accounts preparation and tax reporting mixed up. If the UK holding company is required to prepare consolidated accounts of course those accounts must include the US subsidiary, but that has nothing to do with where either the holding company or the subsidiary pay tax, or how much tax they pay.

Thanks (1)
Replying to johngroganjga:
avatar
By Rubina Anjum
03rd Nov 2021 11:22

Hi John
I think question muddled up.I am clear about the consolidated accounts but not sure about the US subsidiary Corporation tax liability. Whether it will be paid in US or in UK along with consolidated Corporation tax return.

Thanks (0)
Replying to Rubina Anjum:
avatar
By David Ex
03rd Nov 2021 11:28

Rubina Anjum wrote:

Whether it will be paid in US or in UK along with consolidated Corporation tax return.

Unless there’s been a development I’m not aware of, UK corporation tax returns are prepared on a legal entity, not a consolidated, basis.

Thanks (0)
Replying to Rubina Anjum:
By johngroganjga
03rd Nov 2021 13:15

There is no such thing as a consolidated tax return, at least in the UK. Yes, there are circumstances in which the US subsidiary might be treated as being tax resident in the UK, but you haven’t provided enough information for anyone to opine on that.

Thanks (0)
avatar
By David Ex
03rd Nov 2021 10:52

Your client needs both a US and a UK accountant. If you are genuinely saying that no US accountant has yet been appointed, I think there could be problems ahead.

Thanks (1)
Replying to David Ex:
avatar
By Rubina Anjum
03rd Nov 2021 11:16

Hi David
My client has appointed US accountant and will be on board during this month.
I am looking for the advice regarding US subsidiary corporation tax liability would be payable in US or UK.

Thanks (0)
Replying to Rubina Anjum:
avatar
By David Ex
03rd Nov 2021 11:23

Rubina Anjum wrote:

I am looking for the advice regarding US subsidiary corporation tax liability would be payable in US or UK.

That was why I suggested appointing a UK accountant.

Thanks (0)
Replying to David Ex:
avatar
By paul.benny
03rd Nov 2021 11:43

Shady

Although apparently the OP is an accountant (but somewhat coy about her qualifications)

(edited)

Thanks (0)
Replying to paul.benny:
avatar
By Rubina Anjum
03rd Nov 2021 12:40

Hi Paul
Did you read the original question.We're looking for UK accountant.Would you like to onboard for accountancy work?

Thanks (0)
Replying to Rubina Anjum:
avatar
By paul.benny
03rd Nov 2021 13:03

In the OP you asked for advice on some tax points and for a tax specialist to advise your client. Not for accountants.

But if you do want to hire my company, sure. Message me with your requirements and I will provide a quote.

Thanks (1)
My photo
By Matrix
03rd Nov 2021 12:22

I expect it depends on the formation of the “subsidiary”, whether a branch, partnership or corporation etc and whether the UK treats the entity as transparent or opaque.

Thanks (1)
Replying to Matrix:
avatar
By Rubina Anjum
03rd Nov 2021 12:36

Thanks Matrix!

Thanks (0)
Share this content