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3.2. Practical Aspects of Tax Residence

Residence is important because it determines the scope of the charge to Corporation Tax.  A company resident in the UK is subject to corporation tax on the whole of its chargeable profits on a worldwide basis, with relief for double taxation.  A company non-resident in the UK is subject to corporation tax where it carries on a trade in the UK through a permanent establishment, while a resident company is subject to UK income tax on non-trading income.