Development Securities (No 9) and others v HMRC

In Development Securities (No 9) and others v HMRC [2017] UKFTT 565 (14 July 2017) the FTT found that Jersey subsidiaries set up to take a single uncommercial decision as part of a scheme were UK resident.

A group of companies had implemented a plan designed to crystallise latent capital losses and it was essential to the success of the planning that the appellant companies were resident in Jersey and not the UK in the period from incorporation until 20 July 2004. The issue was therefore whether the Jersey companies were UK tax resident in the relevant period.

The FTT observed that a company resides where the ‘real business’ is carried on. Establishing this requires a factual enquiry to ascertain who makes the strategic and management decisions about the company’s business and where those decisions are made. These powers are generally but not always vested in the...