UKFTT 162 (2009) Laerstate BV v HMRC

Company residence - HMRC won

Case Summary:

Laerstate BV was a Dutch incorporated company which was wholly owned by Mr D Bock a German national. The directors for some of the time were Mr Bock and a Mr Trapman (a Dutch national) and for some of the time Mr Trapman alone.

The company made a gain on Lonrho shares.

The First-tier Tribunal held, “throughout the period during which Mr Bock was a director we find that he carried out activities of the Appellant of a strategic and policy nature and managed the business of the Appellant, and that he did so to a substantial extent in the UK.”

The Tribunal also reached the same conclusion for the period when Mr Bock was not a director.

So the Company was controlled and managed in the UK and so UK resident as well as Dutch resident. It was effectively managed in the UK under the DTA tie breaker and so UK treaty resident. UK tax was due.