Double taxation meaning

Double tax treaties (DTTs) have a dual nature. They function simultaneously as: international agreements between contracting states, and elements of a contracting state’s domestic law For a DTT to take effect, each contracting state must: sign and ratify the treaty, and incorporate the treaty’s provisions into its domestic legislation In some jurisdictions, a DTT is given automatic domestic effect as soon as it is signed and ratified. Elsewhere, including the UK, a further legislative step is required. In the UK, the arrangements set out in a DTT (and any amending protocol) are brought into domestic law as schedules to Orders in Council and are published as statutory instruments (SIs). After the DTT has taken effect in the domestic law of both the UK and its treaty partner, and any additional formalities or procedures required by the DTT (such as exchanging diplomatic notes) have been completed, the DTT will come into force. The treaty will...

In this issue: Trusts Court of Protection UK taxes for Private Client HMRC Manuals updates Insolvency—Private Client Charity and philanthropy Contentious trusts and estates Scotland, Wales and Northern Ireland International Question of the week Daily and weekly news alerts LexTalk®Private Client: a Lexis®PSL community New and updated content Dates for your diary Trackers Latest Q&A Useful information Trusts Companies House publishes guidance on removal of overseas entities from register Companies House has issued guidance setting out the process for taking an overseas entity off the Register of Overseas Entities. It applies where the entity no longer holds registered title to UK land or property acquired on or after 1 January 1999 in England and Wales, 8 December 2014 in Scotland, and 5 September 2022 in Northern Ireland. The guidance confirms the entity must have disposed of all UK property or land, and the transfer of ownership...

Court of Appeal judgment – 27 May 2025 Because Susquehanna International Securities Ltd and two affiliates sit beneath a disregarded Delaware vehicle that bears no tax liability, the Court of Appeal (27 May 2025) held they fall outside the scope of the US–Ireland double-taxation treaty. Consequently, the Susquehanna entities cannot invoke the treaty’s equal treatment clause to claim an Irish tax relief reserved for residents of the European Economic Area, the court ruled. The companies had sought to rely on Section 411 of the Taxes Consolidation Act 1997, which permits tax relief to be surrendered within companies, the judgment noted. The court stated: ‘The central issue between the parties is whether it is material that the taxpayers’ parent is treated as fiscally transparent for the purposes of US tax law’...

What are the practical implications of this case? The central question on this appeal was whether the pension drawdowns were ‘paid in consideration of employment’. HMRC argued that moving occupational pension entitlements to a SIPP, essentially an investment product that does not require employment as a condition, severed the necessary link to the original employment and meant the pension could be taxed in the UK. As many of the UK’s DTCs with other jurisdictions include wording similar to the UK–Portugal DTC, the outcome may have significant consequences for expats whose situations resemble that of the appellant. The First-tier Tribunal Tax (FTT) offers helpful clarification of the principles to be applied when deciding whether there is a sufficiently strong connection between an expat’s pension withdrawals and their former employment in such cases...

This Practice Note consolidates the HMRC Manuals tracker that featured weekly in the Private Client highlights from January 2021 to December 2024, arranged by HMRC Manual in reverse chronological order. It captures many of the key amendments to the HMRC Manuals set out below that will interest Private Client practitioners. For the combined tracker from January 2025 onwards, see Practice Note: Consolidated HMRC Manuals tracker 2025–26–Private Client. Avoidance Handling Process Manual Pages amended • Date of change • Comments Added: AHP1000, AHP1200, AHP1300, AHP1400, AHP1450, AHP2000, AHP2100, AHP2200, AHP2300, AHP3000, AHP3100, AHP3200, AHP3300, AHP3400, AHP3500, AHP4000, AHP4100, AHP4200, AHP4300, AHP4350, AHP4400, AHP4500, AHP4550 and AHP4570 Date: 29 September 2023 Summary: This new manual sets out HMRC’s method for managing tax avoidance risks across all taxes and HMRC directorates, aiming for consistency and effectiveness. The overview sections describe what HMRC regards as tax avoidance, as distinct from lawful tax planning. They also outline the role of iTAPE, a specialist network within HMRC that leads...

Many UK-resident companies are expected to operate solely within the UK, with their entire customer base and supplier network located here, so that all profits and gains arise from UK activity undertaken domestically within national borders. Nevertheless, this is not universal; for a sizeable proportion of UK companies, overall profits also comprise non-UK amounts earned from activities outside the UK...

In October 2021, countries participating in the Organisation for Economic Co-operation and Development (OECD)/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) (the OECD Inclusive Framework) endorsed a ‘two-pillar’ package addressing the tax issues stemming from the digitalisation of the global economy. The two pillars constitute an ambitious effort to reform and modernise international tax rules that allocate where, and how, profits are taxed. Pillar One is chiefly (though not exclusively) aimed at the digital economy: ‘a world where enterprises can effectively be heavily involved in the economic life of different jurisdictions without any significant physical presence and where new and often intangible value drivers increasingly come to the fore’. Pillar One introduces two elements: a new taxing right that stretches beyond traditional tax nexus rules anchored in physical location (Amount A) a standardised methodology for transfer pricing baseline marketing and distribution activities between related parties (Amount B). This Practice Note provides a high-level summary of: the tax...