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HMRC internal manual

International Manual

HM Revenue & Customs
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Company residence: when HMRC will not usually review residence: other cases

Cases falling outside the examples

Inevitably very many cases will fall outside the scope of the examples set out at INTM120150. Whilst this means that they will not strictly be covered by this guidance it is crucial to remember that the application of the case law test depends on the facts in particular situations. Therefore a consideration of the reasons why a particular company falls outside the examples may assist in assessing the likelihood of HMRC raising enquiries. The examples therefore have a wider role in the risk assessment of company residence issues.

For instance, a company may fall outside one of the examples because it is not wholly owned by a UK headed group or sub-group. Where this is due to the presence of small minority shareholdings wholly unconnected with the wider group arising from, say, local legal requirements regarding employee share ownership, it is unlikely to have an impact on the corporate residence issue.

The examples should not be interpreted to suggest that the correct test for residence involves comparing the number of board meetings held in the UK against those held elsewhere. The application of the test in De Beers Consolidated Mines Ltd v Howe, 5TC213 involves scrutinising the company’s course of business and trading. Relevant factors would therefore be what happened at particular board meetings and what happened between them.

HMRC is willing to discuss residence issues with businesses. Given the factual basis of the case law test such discussions are generally likely to be more profitable the more information there is available about a particular situation. However in some cases, such as those involving dual resident companies or non-standard tie-breakers (see INTM120070), operational certainty may not be achievable without a joint approach by the company to both tax authorities under the relevant double taxation agreement.