INTM620720 - Offshore Receipts in respect of Intangible Property (ORIP): Glossary of terms: Meaning of residence

ITTOIA05/Ch2A/S608D

For the purposes of Chapter 2A, a person is “resident” in a territory if they are liable to tax there by reason of their domicile, residence or place of management. However, they will not be treated as resident in a territory (even if under the laws of the territory they are liable to tax there by reason of their domicile, residence or place of management) if they are only liable to tax there on: income from sources in that territory; capital situated there, or, amounts remitted to (or received in) the territory (See example 1).

This section also treats a person as resident in a territory outside of the UK, if the laws of the territory, generally or for particular purposes, treats them as such and those territories have no provisions for a person being resident there for tax purposes (See example 2).

Persons ordinarily classed as resident in a full treaty territory (by virtue of the other subsections of this section) shall, for the purposes of this section, be classed as not resident in that territory if they are expressly excluded from obtaining relief by way of the double taxation agreements in place with that territory. S608D(4) applies prospectively for amounts arising from 5 November 2019 (See example 3).

Example 1

A company is incorporated, managed and controlled in territory A where it is subject to tax on a territorial basis. For the purposes of this section the company is treated as not resident in territory A. Note that treaty relief may still be available to the company under the terms of its DTA with the UK on the making of a treaty claim and subject to s608W.

Example 2

A company is incorporated in the Cayman Islands and is generally subject to the laws of the Cayman Islands. The Cayman Islands have no concept of residence from a tax perspective. The company is treated as resident in the Cayman Islands.

Example 3

A company is based in Barbados and is an International Business Company. For the purpose of this section the company is treated as not resident in Barbados for amounts arising from 5 November 2019 onwards as whilst this is a full treaty territory, a Barbados International Business Company is an entity specifically excluded under the DTA with the UK.