Chapter 69 – International Tax: Introduction and Connecting Factors
69.3 UK Connecting Factors: Individual’s Residence. In counting days for the
statutory residence test, relief for ‘exceptional circumstances’ must not be construed
more narrowly than the statutory wording requires: see Taxpayer v HMRC [2022]
UKFTT 133 (TC).
69.6. Residence of Corporations. For a recent case considering the relationship
between domestic law and treaties on the question of corporate residence (and
carrying on a business) see GE Financial Investments v HMRC [2023] UKUT 146
(TCC).
69.11 Base Erosion and Profit Shifting (BEPS). The OECD Inclusive Framework
Pillar 2 project has moved into the implementation stage. In Finance (No 2) Act 2023,
the UK introduced a multinational top-up tax and domestic top-up tax, with effect in
relation to accounting periods commencing on or after 31 December 2023. These
detailed and complicated rules implement the UK’s commitment to introduce an
Income Inclusion Rule (IIR) and Qualifying Domestic Minimum Top-up Tax
(QDMTT) in line with the approach agreed with international partners under the Pillar
2 model rules. The Pillar 2 model rules are designed to ensure that very large
multinational companies pay a minimum level of tax in each jurisdiction in which
they operate. For the latest on the Pillar 2 project see the OECD Tax website:
Chapter 71 – UK Residents and Foreign Income
71.4 What is a Remittance? The Current Rules. In Sehgal and another v HMRC
[2022] UKFTT 312 (TC) arrangements under which the taxpayers settled a debt
indemnity arising from a share sale did not give rise to a remittance to the UK because
the right to the waiver was not property and did not itself derive from a chargeable
gain.
71.6. Anti-avoidance: Transfer of Assets Abroad–Attribution of Income for
Income Tax. In Hoey and others v HMRC [2022] EWCA Civ 65, the Court of Appeal
considered, briefly, the interaction and priority between the TOAA code and the
charge to tax on employment income, as well as the possibility of double taxation. At
the time of writing the Court of Appeal decision in Fisher was under appeal to the
UKSC.
72.7 Diverted Profits Tax. The DPT rate increased to 31% in 2023, reflecting the rise
in the main corporation tax rate.
Chapter 76 – Double Taxation: UK Treaty Relief
76.3. Interpretation of Treaties. For an interesting case on interpreting Article 6 of
the UK-Canada tax treaty, including taking into account both the English and French
versions, see Royal Bank of Canada v HMRC [2023] EWCA Civ 695.
