Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Permanent establishment definition

What does Permanent establishment mean? In practice, a permanent establishment (PE) describes the level of business presence that creates a corporation tax nexus for a non‑resident company and the basis for attributing profits to that presence. In the UK it is a statutory term in cta 2010, s 1141: a company has a PE in a territory if it has a fixed place of business there through which its business is wholly or partly carried on, or if a person acting for it there has, and habitually exercises, authority to do business on its behalf. The legislation excludes certain limited activities (often...

UK foreign branch exemption: FPEA calculation, exceptions for UK land and NRCGT, plus rules on gains, capital allowances, immovable property, withholding tax and exclusions for small, close and insurance companies

Published by a LexisNexis Tax expert

Practice notes

As set out in Practice Note: Foreign branch exemption—structure of the foreign branch exemption, the foreign permanent establishments amount (FPEA) is the principal determinant of the extent of profit relieved from UK tax under the foreign branch exemption. This is because, where an election is in force, any profit or loss taken into account in arriving at the FPEA must be ignored for tax purposes—by making the necessary ‘exemption adjustments’—when calculating the company’s taxable total Profits.

Exceptions

There are two significant exceptions to these Rules, each of which is considered in turn below...

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Jisun Choi

Skadden

Jisun Choi advises a wide range of clients, including multinational corporations in various industries, private equity funds and financial institutions, on international and U.K. corporate tax matters, with a particular transactional focus on mergers and acquisitions and group restructurings, as well as associated financings.Ms. Choi’s practice involves structuring and advising on the tax aspects of:• private and public acquisitions and disposals of businesses, including management buyouts, sales of businesses in administration and auction sales• international group holding structures, including on joint ventures, the use of the U.K. as a holding company jurisdiction, and investment and asset management structures• group reorganisations and restructurings, including de-mergers of businesses and post-acquisition integration planning• capital market transactions, including initial and secondary listings of equity and debt instruments, and return of value to shareholders• banking and derivative transactions, including bank credit facilities and private placement arrangementsIn addition, Ms. Choi has...

Web page updated on 22/05/2026

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