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HMRC internal manual

International Manual

Sovereign Immunity

Income and gains arising to, and in the sole direct beneficial ownership of:

  • the Head (for example a reigning Monarch or a President) of a foreign independent State
  • the Spouse of such a Head of State
  • a foreign independent Government

are also normally immune from taxation.

This immunity, which is known as Sovereign Immunity from taxation, has its origins in a general principle of international law that one Sovereign should not subject another to its municipal laws.

Sovereign Immunity from taxation does not apply to income arising to and beneficially owned by a legal entity that is separate and distinct from the foreign Government, even though that government may own the whole of the share capital.

It is only BAI, Business International (Immunities & Privileges) that is responsible for determining whether or not Sovereign Immunity applies.