The appellant Company was registered in the Cape Colony and it’s business was mining for diamonds in mines which it possessed in South Africa, and selling the diamonds there under annual contracts to a syndicate for delivery there. The Head Office was in South Africa, and general meetings were always held there. Some of the directors resided in South Africa and weekly meetings of the directors were held there. But the majority of the directors resided in England, and the meetings in London were the meetings at which the real control was exercised in all the important business of the company, except the actual mining operations. The sales of the Diamonds were controlled by the London board.
Held: The company was resident in the United Kingdom for the purposes of income tax. A foreign corporation may reside in this country for the purposes of income tax.
The question of where a company was resident was one of fact: ‘In applying the conception of residence to a company, we ought, I think, to proceed as nearly as we can upon the analogy of an individual. A company cannot eat or sleep, but it can keep house and do business. We ought, therefore, to see where it really keeps house and does business . . The decision of Kelly C.B. and Huddleston B. in the Calcutta Jute Mills v. Nicholson and the Cesena Sulphur Co. v. Nicholson, now thirty years ago, involved the principle [is] that a company resides for purposes of income tax where its real business is carried on . . I regard that as the true rule, and the real business is carried on where the central control and management actually abides.’
Whether any particular case falls within that rule is a ‘pure question of fact, to be determined not according to the construction of this or that regulation or bye-law, but upon scrutiny of the course of business and trading.’
Lord Loreburn LC
[1906] AC 455, (1905) 2 KB 612, 13 Mans 394, 22 TLR 34, 5 Tax Cas 198
England and Wales
Citing:
Adopted – Calcutta Jute Mills Co Ltd v Nicholson 1876
(Court of Exchequer) The residence of a company for tax purposes is decided by where the ‘central management and control’ is. . .
Cited by:
Cited – Wood v Holden (Inspector of Taxes) ChD 8-Apr-2005
The parties had entered into complex share transactions for the sale of their trading business, and sought to avoid liability for capital gains tax.
Held: Gains on disposals between members of a non-resident group of companies were exempt. The . .
Cited – Wood and Another v Holden (HMIT) CA 26-Jan-2006
Husband and wife sold their business, arranging matters so as to avoid paying Capital Gains Tax by transferring their interest between members of a group of companies which was non-resident.
Held: The scheme was effective. The sole real issue . .
Cited – Revenue and Customs v Smallwood and Another CA 8-Jul-2010
The taxpayers had set up trusts which they said were based in Mauritius allowing them to claim double taxation relief. The Revenue had issued closure notices, confirmed by the SPCT, but overturned by the High Court. The Revenue appealed, saying that . .
Cited – Tulip Trading Ltd v Bitcoin Association for BSV and Others ChD 5-Jan-2022
Security required for Bitcoin claim
Two applications for security for costs. The claimant claimed against fifteen overseas residents requiring a re-write of cryotocurrency systems so that he could recover sums he said were due to him in respect of Bitcoin assets which he said have . .
Lists of cited by and citing cases may be incomplete.
Taxes Management, Company, Income Tax
Updated: 17 January 2022; Ref: scu.224771