Offshore Companies

Problem identified

The business was a UK based private equity company which held a number of property investments in offshore locations (Jersey and Luxembourg) and wanted to ensure that each structure was being properly controlled and managed in each jurisdiction. The concern was that failure to comply with the Central Management and Control provisions would result in the offshore company being deemed UK tax resident by the UK Tax Authorities.

Solution proposed

A comprehensive investigation was carried out into the “Indicators of Central Management and Control” to identify the key requirements needed to ensure each offshore company could demonstrate compliance with these indicators. In particular the investigation focused on an examination of the role, expertise and tax residence of each director; the location and frequency of board meetings; whether each board meeting was properly quorate with appropriate agendas, board information packs and records of minutes in place and finally determining the location of company records and how each of the company bank accounts was administered.

Outcome

Upon conclusion of the investigation a report was then presented to the business and circulated to the offshore trustees and advisers setting out clear lines of responsibilities between each party and how they should interface between the UK and offshore jurisdictions to ensure compliance with the Central Management and Control provisions. The recommendations were then followed up to ensure each party was conforming to its obligations.