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HMRC internal manual

International Manual

Company residence: when to make a submission to BAI

The need for detailed examination of prime records and interviews with witnesses possibly overseas, make some cases suitable for working by investigation sections of Head Office. In some cases, Specialist Investigations (‘SI’) may be able to help in investigating the prime facts and the first step should be to show the case to the local SI liaison officer. The SI intranet home page includes information on liaison arrangements.

BAI,  Base Protection Policy Team would like to see at an early stage cases of suspected avoidance where there may be a possibility of challenge on residence.

Advice should be sought on other cases where the facts have been established as far as possible but there is doubt or disagreement as to how they should be interpreted.

Cases should also be submitted to BAI where the following circumstances apply:

  • where there is doubt over whether a company is ‘carrying on business’ - see INTM120040.
  • where there is doubt over whether a company is ‘taxable in a territory outside the UK’ - see INTM120040.
  • For any case where a UK incorporated company claims to be UK non-resident other than by the operation of a treaty - see INTM120040.
  • For any case in which the company presses a claim, or it appears that the central management and control and effective management are located in different territories should be submitted to BAI once the facts have been obtained. See INTM120070.
  • Do not argue that a holding company is caught by CTA09/S18 without first submitting the file to BAI. See INTM120070.
  • Any claim that the wording in the Isle of Man or Channel Islands treaties does amount to a tie-breaker should be referred to the Tax Treaty Team in BAI. See INTM120070.

It is unlikely that enquiries will be encountered arising from the commencement and transitional provisions of the incorporation rule. However, guidance is provided at INTM120050, including the requirement to make a submission in the following circumstances:

  • Where, exceptionally, a company incorporated in the UK before 15 March 1988 (other than a shelf company) claims retrospectively that it was never resident in the UK or that it migrated before 15 March 1988.
  • If a company which appears to have been a shelf company on 15 March 1988 persists in a claim that it carried on business before that date.
  • Where there is doubt over the date on which a company commenced activity.
  • Where there is doubt or suspected avoidance by a UK resident in the case of a nowhere company which has been active requesting confirmation of its non-residence status immediately before 15 March 1988 in order that it does not come onshore until 15 March 1993.