In this week’s Q&A, Croner-i tax advisory lead Stephen Fletcher CTA, explains the complex tax considerations when a company decides to shift operations to sunny Ibiza but retains dual-tax residency
Q. My client is the only shareholder and director of a fully remote digital marketing agency operated through their UK incorporated company, which has been used via profits to acquire a UK residential property for use in a rental business.
The client is looking to relocate to Ibiza, where the company will become Spanish resident for tax purposes. They will continue to operate the trade and property business and wondered what the tax effects are of the company’s migration?
A. A UK resident company is chargeable to corporation tax on income on all of its profits irrespective of their source, whereas a non-UK resident company is generally only within the charge to corporation tax on income arising from trades operated through a UK permanent establishment or UK property income (s5 CTA 2009).
