Ifa meeting 7 th april
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IFA Meeting 7 th April. Foreign Branches – an attractive regime? Mike Hardwick Linklaters LLP. An attractive regime?. Attractive features Elective Company by company election Treaty allocation followed Extension to chargeable gains Streaming election Disappointments

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IFA Meeting 7 th April

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Ifa meeting 7 th april

IFA Meeting 7th April

Foreign Branches – an attractive regime?

Mike Hardwick

Linklaters LLP


An attractive regime

An attractive regime?

  • Attractive features

    • Elective

    • Company by company election

    • Treaty allocation followed

    • Extension to chargeable gains

    • Streaming election

      Disappointments

    • Can’t both exempt profits and use losses in UK

    • Election irrevocable

    • Can’t cherry pick branches in same company

    • Motive test follows CFC motive test


Comparison of foreign branch v foreign subsidiary

Comparison of Foreign Branch v Foreign Subsidiary


Pros and cons of electing branch

Pros and cons of electing branch


Should you elect a foreign branch

Should you elect a foreign branch?

  • Branch in high tax country

    • Don’t elect if losses possible

  • Branch in low tax country

    • Elect unless losses likely

  • Start up where losses likely

    • Don’t elect and incorporate/elect/move to elected company when becomes profitable (note s18O CTA 2009)


Possible structure

Bank PLCUK

A LtdUK (no election)

B LtdUK (election made)

  • High tax branches

  • Low tax branches expecting losses

  • Start ups

  • Profitable low tax branches

Possible Structure


Linklaters llp

Linklaters LLP

  • One Silk Street

  • London EC2Y 8HQ

  • Tel: (+44) 20 7456 2000

  • Fax: (+44) 20 7456 2222

  • Linklaters LLP is a limited liability partnership registered in England and Wales with registered number OC326345. The term partner in relation to Linklaters LLP is used to refer to a member of Linklaters LLP or an employee or consultant of Linklaters LLP or any of its affiliated firms or entities with equivalent standing and qualifications. A list of the names of the members of Linklaters LLP together with a list of those non-members who are designated as partners and their professional qualifications is open to inspection at its registered office, One Silk Street, London EC2Y 8HQ or on www.linklaters.com and such persons are either solicitors, registered foreign lawyers or European lawyers.

  • Please refer to www.linklaters.com/regulation for important information on our regulatory position.

  • Please note that the proposed fee arrangements, client details, referee details and working methodology descriptions contained in this document are confidential to Linklaters and will remain so for a period of four years from the date of this document.


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