Corporation Tax on Foreign Companies

Hi, I am the director and 100% shareholder of a company in Singapore (Company X), and a director and 50% shareholder of a company in Singapore (Company Y). Company X and Company Y have no business relationship between them and all their clients are outside the UK. I will become resident of the UK later in the year, thus Company X will be fully controlled from the UK, and Company Y will be 50% controlled from the UK. Both companies will also remain resident of Singapore with no other PE. After reading your guidance; - INTM225500 indicates that CFC rules will not apply if the taxable profits of a company are less than £500k per annum. - INTM224100 indicates that CFC rules will not apply for the first 12 months if the company will become 'uk resident' for the first time. - INTM226000 indicates that CFC rules will not apply if the company pays 75% or more of the UK corporation tax rate (Singapore 17%). Firstly, is my understanding of the guidance above correct? Secondly, I believe all three of the above exemptions apply to both Company X and Company Y. What action, if any, do I need to take in relation to these companies do I need to take with HMRC? Thanks

Hi
It is for the directors to determine the correct tax position, with help from a professional tax accountant as appropriate.  

I own a US single member llc for the purposes of dropshipping in the USA to US customers. The US IRS views my company profits as personal income as I am a single member LLC, and say I should pay tax in my resident country as I do not have any physical inventory or (physical nexus). I understand there is a mismatch between the US and UK where the UK see my LLC as a separate company and I wanted to know, how I should be declaring and profits and whether this would be via corporate tax, income tax or both. And what forms I would use to do so. Thank you

Hi,
Please refer to guidance at:
USA: tax treaties
HMRC takes the view that for UK tax purposes LLCs should generally be regarded as taxable entities and not as fiscally transparent.
Accordingly, the UK taxes a UK member of an LLC by reference to distributions of profits made by the LLC and not by reference to the income of the LLC as it arises.  
This means the income of the LLC will be taxed as a distribution, which is subject to income tax.  
Please see guidance at:
SAIM5210
Guidance on registering for Self Assessment is available at:
Self Assessment tax returns
Thank you.

Hello thank you for that explanation, I want to just confirm I have understood correctly as one aspect conflicts for me, if I could please be corrected. "Accordingly, the UK taxes a UK member of an LLC by reference to distributions of profits made by the LLC " (This refers to any personal income I have taken is taxable as a distribution on my personal income self assessment, ) "and not by reference to the income of the LLC as it arises (Capital retained within the business which is not paid out as a distribution to myself as an income, is not taxable and I should not declare as a dividend on my income self assessment). " "This means the income of the LLC will be taxed as a distribution" (this part conflicts for me as it refers to the income of the company and not myself?, does it refer to the total profits of the company? Meaning I should declare my companies profit as a dividend on my income self assessment, making my companies total profits subject to income tax) Or is this still referring to only money withdrawn from the businesses being taken as income by myself subject to the dividend tax. " Thank you for your assistance, I just want to ensure I am interpreting you correctly.

Hi Harry Rollerson,
We refer you to our previous response and the guidance link provided.
If you are unable to ascertain your position from that guidance then, this is a matter for Self Assessment.
It is for the directors to determine the correct tax position, with help from a professional tax accountant as appropriate.  
Thank you.