The UK parent company owned subsidiaries incorporated in East Africa and carried on trading activities there. The managing director of the parent company concluded that ‘the situation of the African subsidiaries was becoming so serious that it was unwise to allow them to be managed in Africa any longer, and that their management must be taken over by the directors of [the parent company] in London.’ The board of directors of the parent company ‘decided that . . they were forced to take over management and control’, and the representative of the parent company in East Africa took over the functions of the local boards, which still existed but stood aside, and controlled the subsidiaries in accordance with the requirements of the parent. Much of that may have been irregular, or even unconstitutional, but it was what happened.
Held: The African subsidiaries had become resident in the United Kingdom. A company can come to be resident in a territory even if it does not hold directors’ meetings there.
Citations:
[1960] AC 455, [1959] UKHL TC – 38 – 712
Links:
Jurisdiction:
England and Wales
Citing:
Cited – New Zealand Forest Products Finance NV v Commissioner of Inland Revenue 1995
(New Zealand) The taxpayer company was established in the Netherlands Antilles as the subsidiary of a New Zealand parent company. It was a vehicle company whose purpose was to raise borrowings on the Eurobond market and to lend the money on to the . .
Cited – Untelrab Ltd v McGregor 1996
(Inland revenue Comissioners) A Jersey company was established as a wholly owned subsidiary of a UK-based group. The directors met in Bermuda, not in Jersey. Its function was to hold surplus group funds, to invest them for the time being, and to . .
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 by:
Applied – Esquire Nominees Ltd v Commissioner of Taxation 1971
(High Court of Australia) The company had directors who lived on Norfolk Island, but also had close connections with an Australian firm of accountants (WBBC), which evolved and implemented a tax scheme for an Australian family. The company acted as . .
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 . .
Lists of cited by and citing cases may be incomplete.
Company, Income Tax
Updated: 30 June 2022; Ref: scu.224773