Revenue Note for Guidance

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Revenue Note for Guidance

835M Determination of residence

Summary

This section sets out the rules for determining the residence of the CFC.

Details

(1) A CFC is regarded as resident in the territory where it is subject to tax by reason of domicile, residence or place of management for an accounting period.

(2) Where two or more territories could be regarded as the place of residence by reason of domicile, residence or place of management, a CFC shall be regarded as resident,

  1. where the company’’s place of effective management is;
  2. if the company’’s place of effective management is in two territories, where more than 50% of the company’’s assets are situated, or
  3. where neither (a) nor (b) applies where more than 50% of the company’’s assets are situated.

(3) Where neither subsection (1) nor (2) applies, a company shall be regarded as being resident where it is incorporated or formed.

(4) The amount of the company’’s assets is determined by reference to the market value of the assets immediately before the end of the accounting period.

(5) Market value should be construed in accordance with section 548.

(6) If a company is considered resident somewhere under the terms of a double tax treaty, in accordance with section 826(1), then that takes precedence over any other subsection in section 835M.

Relevant Date: Finance Act 2019