UK Holding Companies

The UK is a highly attractive location for holding companies and regional or international headquarter structures. It offers a generous ‘participation exemption’, exclusions from withholding tax, tax-free dividend receipts for corporates and an extensive double tax treaty network.

The UK holding company regime offers a ‘participation exemption’ that allows, subject to conditions, dividends received by a UK holding company to have no corporation tax liability in the UK, while capital gains made by a UK holding company on the sale of shares in a subsidiary are also free of tax.

There is no exit tax on dividends paid by a UK company to shareholders or parent companies and the UK’s excellent global network of treaties and agreements further allows for tax efficient profit extraction by way of interest or royalties.

The UK does not charge capital gains tax on the sale of shares in the holding company situated in the UK by non-residents, except for UK property rich companies. There is therefore no exposure to UK capital gains tax if the holding company itself is disposed of by non-resident shareholders.

The combination of the extensive double tax treaty network and attractive tax regime, together with the good reputation of UK companies worldwide, represent compelling reasons for using the UK to establish an international headquarters. This can be hugely beneficial when considering business expansion worldwide.