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HMRC internal manual

Capital Gains Manual

Migration of companies: residence: company becoming treaty non-resident

A company may be dual resident, see CG42320, in the UK and in another country with which we have a Double Taxation Agreement. In that event most modern treaties (but not the UK/USA treaty) contain a tie-breaker clause which awards residence to one country only for the purposes of the agreement. If under the tie-breaker clause the company is treated as not resident in the UK it is described as `treaty non-resident’. In such a case our taxing rights on gains will usually be restricted. From 30 November 1993 all such companies are deemed to be not resident in the UK for taxation purposes, see CG42303.