Trigger & Response

Question 1

(T&R) What do we need to think about in respect withholding tax

Answer 1

This is a just where the tax has been paid at source to the local authority - it is not a form of additional tax but more just an alternative collection method and is to be considered when thinking about double tax relief

Question 2

(T&R) A company in the current year has losses and has some left over

Answer 2

The company could look to make a carry back claim under CTA2010 s.37 - However under corporation tax rules, as current year claim must be made first before a carry back claim can be made.

Question 3

(T&R) - Transfer Pricing risks for operating overseas companies

Answer 3

So for permanent establishments which have not elected to make a section 18a CTA2009 election, there is not as much of a risk due to the fact that the profits are all brought back into the UK. However, for Subs there is a greater risks and we want to make sure all the relevant procedures and documentations are in place to ensure transfer pricing rules are being followed

Question 4

(T&R) - We have a 50 year lease

Answer 4

This is considered to be a long lease and therefore any disposals are done via a normal CGT calculation

Question 5

(T&R) - What case law/name should we refer to when considering a companies residency in the UK

Answer 5

Think about the De Beers case - effectively the diamonds were mined in South Africa but the central management was done in the UK making it a UK resident company for tax purposes

Question 6

(T&R) - We have been told that the trade has been transferred to another group company

Answer 6

In this event it will be a successor event in which any potential capital allowance pools and losses can be transferred across, subject to conditions and limits around outstanding liabilities in the company

Question 7

(T&R) - We have been told the jurisdiction that the company is operating a foreign branch in has a lower rate than the UK

Answer 7

This should immediately make us think about the double tax relief permanent establishments receive - as it is limited to the LOWER of the overseas tax rate suffered and the UK tax rate - so we would want to be thinking that additional UK tax burdens will be suffered

Question 8

(T&R) - We have a question where we have been asked about expanding overseas

Answer 8

The first thing we should remember that a UK company will be taxed on their worldwide profits

We need to be mindful that there is two real options here:
1. Operate as a branch
2. Setup as a controlled foreign Company

However we also need to be mindful that the appropriate transfer pricing rules need to be put in place

Question 9

(T&R) - We have a company that has been caught by the non-finance profits CFC gateway

Answer 9

Does the finance company exemption chapter 9 rules & furthermore, does the loan count as a qualifying loan resource?

Question 10

(T&R) - We have been told about the granting of a short lease or short sub lease

Answer 10

we need to be mindful that in either situation we will have to be mindful that this will consist of our multiple steps and elements of property income and capital income (with sub leasing being the more complicating with 3 steps)

Question 11

(T&R) - Companies overseas PE is in a higher tax jurisdiction

Answer 11

No UK tax to pay

Question 12

(T&R) - Finance Exemption for CFC

Answer 12

Think 3 conditions with the 3rd the quilting loan relationship which is then the 4 conditions

Question 13

(T&R) - If we have a royalties or interest payments made to non-resident companies

Answer 13

In either case we always want to be mindful and note that we want to check if withholding tax is being charged and levied - additionally to check if any double tax treaties are in place

Question 14

(T&R) - we have been given an RDEC question with two companies in the group making claims

Answer 14

There is various stages and steps which interact with each other so we will need to consider group relieving aspects

Question 15

(T&R) - Earnouts

Answer 15

We want to focus on the definite figures not facts

Question 16

(T&R) - Talking about total opening negative amount

Answer 16

This looks back retrospectively 6 years from the start of the relevant accounting period the election was made from