Closing or Making a UK Subsidiary Dormant: Accounts, Tax and Companies House
What Foreign-Owned UK Companies Need to Consider Foreign-owned groups sometimes reach a point where a UK subsidiary is no longer needed. The company may either be kept dormant for future use or formally closed and removed from the Companies House register. These are not the same process. A dormant company continues to exist as a […]
UK Director Responsibilities for Foreign-Owned Companies
What Directors of UK Subsidiaries Need to Know Foreign-owned UK companies are often managed as part of a wider international group. The overseas parent may make strategic decisions, provide funding and appoint the UK directors. However, being part of an international group does not remove the legal responsibilities of the UK company’s directors. A UK […]
Intercompany Recharges: How Should a UK Subsidiary Account for Group Costs?
A Practical Guide for Foreign-Owned UK Companies Foreign-owned UK subsidiaries often incur costs on behalf of the wider group or receive services from their overseas parent. These costs may include: The group may then recharge some or all of these costs to the UK subsidiary. The UK company needs to account for these recharges correctly […]
Dividends from a UK Subsidiary to a Foreign Parent
UK Tax and Withholding Tax Explained Foreign-owned UK subsidiaries often distribute profits to their overseas parent company through dividends. The good news is that ordinary dividends paid by a UK company to a foreign parent are generally not subject to UK withholding tax. However, the UK subsidiary must still have sufficient distributable profits and follow […]
UK Group Relief: Can a Foreign-Owned UK Subsidiary Transfer Tax Losses?
A Practical Guide for International Groups Foreign-owned UK subsidiaries often generate tax losses during their early years of trading, particularly where the UK business is still being established or is receiving significant investment from its overseas parent. A common question is whether those losses can be transferred to another UK company within the same international […]
UK Withholding Tax on Payments to Overseas Companies
Interest, Royalties, Services and Other Cross-Border Payments UK companies frequently make payments to overseas companies for services, financing, intellectual property and other business activities. For foreign-owned UK subsidiaries, this can include payments to an overseas parent company or another group entity for intercompany interest, royalties, management services and other costs. Not every payment to an […]
UK Corporation Tax Losses for Foreign-Owned Companies
How UK Subsidiaries Can Use, Carry Forward and Share Tax Losses Foreign-owned UK companies can make Corporation Tax losses for many reasons, particularly during their first years of operation. A UK subsidiary may incur losses while establishing its business, investing in employees, developing technology, entering the UK market or building its customer base. Making a […]
Transferred Assets Offshore? The UK Tax Rule You Need to Know
UK residents are normally taxed on their worldwide income. However, HMRC generally cannot tax foreign income that belongs to a non-UK resident. This could allow a UK resident to transfer income-producing assets to an offshore trust or company while continuing to benefit from the income. The Transfer of Assets Abroad rules prevent this type of […]
Year-End Adjustments for UK Subsidiaries: Intercompany Recharges and Group Reporting
A Practical Guide for Foreign-Owned UK Companies For foreign-owned UK subsidiaries, year-end accounting often involves more than simply closing the UK company’s books. The UK subsidiary may need to record intercompany recharges, management fees, shared group costs, interest and other year-end adjustments before its statutory accounts and Corporation Tax return are prepared. These adjustments also […]
UK Subsidiary Funding: Intercompany Loans, Interest and Withholding Tax
A Guide for Foreign-Owned UK Companies Foreign parent companies often provide funding to their UK subsidiaries through intercompany loans. This can be an efficient way for an international group to finance a UK operation, whether the money is needed for working capital, expansion, acquisitions, equipment or general business activities. However, an intercompany loan between a […]