... only on their profits which they remit to it. A company resident outside the UK is only liable to UK corporation tax in respect of the income or gains derived from carrying on a trade in the UK through a permanent establishment i.e. branch or agency (ICTA 1988, s 11). Accordingly, unless the property is used by or held for such a branch or agency (s 11(2)(a)) the offshore company is liable to income tax in respect of a Schedule A business in accordance with the provisions of ICTA 1988 s 15. Fundamental Weaknesses: There are two fundamental weaknesses in this approach. One is the concept of corporate residence. This arises because the taxation of British companies grew out of the taxation of individuals. The courts and Inland Revenue have struggled with the misconceived question of where a company is resident but there is still an absence of a clear basis of ...

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