Skip to content

ACCA Strategic Professional · Advanced Taxation (UK) · Corporation tax: the comprehensive calculation of the corporation tax liability, including overseas aspects

Zenith Ltd was incorporated in Jersey but its board of directors meets in London every month and takes all strategic decisions there. For UK corporation tax purposes, which statement is correct?

Zenith Ltd is UK resident for corporation tax because its central management and control is exercised in the UK, where the board meets and takes strategic decisions. Incorporation in Jersey does not prevent UK residence, and the 183-day test applies to individuals only.

  1. AZenith Ltd is UK resident because its central management and control is exercised in the UKCorrect
  2. BZenith Ltd is not UK resident because it was incorporated outside the UK
  3. CZenith Ltd is UK resident only if more than 183 days of board meetings are held in the UK
  4. DZenith Ltd is UK resident only if it has a UK permanent establishment

Explanation

A company is UK resident if incorporated in the UK or, under common law, if its central management and control is exercised in the UK. Board decisions taken in London mean Zenith is UK resident despite Jersey incorporation. Option B ignores the common law test; the 183-day test applies to individuals, not companies.

Did you get it right without looking?

One question tells you little. A timed set on Corporation tax: the comprehensive calculation of the corporation tax liability, including overseas aspects shows your real accuracy, how long you take and where you lose marks.

Practise Corporation tax: the comprehensive calculation of the corporation tax liability, including overseas aspectsFree diagnostic mock

More Corporation tax: the comprehensive calculation of the corporation tax liability, including overseas aspects questions