Corporate Residence & POEM – Central Management, Control and Substantive Governance

Domestic residence tests and central management & control

• Overview of UK residence rules: incorporation and central management & control; contrast with residence rules in other jurisdictions.
• Meaning of central management and control – the locus of ultimate executive decisions; difference between daily management and strategic control.
• HMRC Statement of Practice 1/90 and key case law:
  • De Beers Consolidated Mines Ltd – residence determined where the real business is carried on.
  • Unit Construction Co Ltd – central management may be outside the country of incorporation.
  • Wood v Holden and Development Securities plc – importance of substantive decision‑making and avoidance of “rubber‑stamping.”
• Role of directors’ residence versus place of meetings; significance of minutes, agendas and evidence of deliberation.

POEM in tax treaties

• Place of Effective Management (POEM) as a tie‑breaker in tax treaties; shift towards mutual agreement procedures in recent OECD updates.
• Comparison of POEM (focus on day‑to‑day management) with central management and control (focus on strategic decisions).
• Examples where POEM remains relevant under older treaties and how to apply the concept in practice.

Governance, evidence and substance

• Establishing board calendars and location protocols to ensure decisions are taken in the intended jurisdiction.
• Drafting detailed minutes and agendas that reflect genuine deliberation and independent decision‑making, avoiding mere endorsement of parent company instructions.
• Ensuring directors have the authority and information needed to make decisions; distinguishing between advice and control.
• Substance considerations: local directors, offices, employees, bank accounts, risk management and control functions.

Practical steps to reduce residence and dual‑residence disputes

• Regular reviews of governance procedures across group companies to ensure ongoing compliance.
• Documentation of tax advice and its use in board deliberations without usurping director control.
• Use of protocols for migrating residence (e.g., exit charges, shareholder consents) and managing cross‑border boards.
• Case study: analysis of the Development Securities decision and lessons learned on board composition and decision‑making.

Case studies and exercises

• Participants review board minutes of a multinational group to identify whether central management and control is exercised in the UK or offshore.
• Group exercise designing a board calendar and location protocol for a newly incorporated overseas subsidiary.
• Scenario analysis where a company is incorporated in Jersey but directors reside in the UK – determine residence and propose mitigation steps.

Redcliffe's course trainer is the CEO and Tax Advisor at a tax consultancy / advisory firm. He advises internationally active businesses and individuals on UK and cross-border tax, with a particular focus on permanent establishment risk, corporate residence/POEM, treaty positions and documentation, and cross-border structuring (including withholding tax considerations and transfer pricing).
The trainer lectures in International Taxation (CIOT/ADIT context) and has held senior tax leadership and advisory roles, including Head of Tax for the Diacron Group and consulting/advisory work with other International Tax firms (including Bain & Company). He has worked across multiple jurisdictions including the UK, Italy, the US and Costa Rica, and brings a practitioner-led, case-driven approach that is grounded in real client scenarios.

This course provides a practical guide to determining corporate residence under UK law and tax treaties, focusing on central management and control and the Place of Effective Management (POEM) concept. Participants will learn to:

• Understand domestic residence tests, particularly the UK rule of incorporation plus central management and control, and compare these with approaches in other jurisdictions.
• Distinguish between central management and control and POEM, recognising when each applies and how treaty tie‑breakers operate.
• Evaluate board governance and decision‑making processes to identify where substantive decisions are made, using leading case law (e.g., De Beers, Unit Construction, Wood v Holden, Development Securities) as practical guidance.
• Implement evidence and substance protocols, including board calendars, meeting minutes and director authority, to support residence positions and avoid dual‑residence disputes.
• Apply knowledge through case studies and exercises, assessing real‑world scenarios and documenting practical steps to maintain tax residence

This course goes beyond theoretical definitions by focusing on practical governance and evidential requirements. Participants learn how to design and document decision‑making processes that stand up to HMRC scrutiny, including detailed board calendars, minutes and authority structures. Real case law examples are used to illustrate pitfalls and best practices, ensuring that attendees leave with actionable tools to manage residence risk. The course also addresses recent developments in OECD treaty practice and their implications for POEM tie‑breakers.

• Tax directors, heads of tax and in‑house tax managers responsible for residence analysis and governance across corporate groups.
• Company secretaries, legal counsel and board administrators involved in organising meetings, drafting minutes and ensuring compliance.
• CFOs and finance controllers who need to understand how residence impacts financial reporting and tax obligations.
• Advisers and consultants specialising in international tax, corporate law or restructuring.
• Directors and entrepreneurs serving on boards of companies with cross‑border operations or group structures.

Corporate residence determines where a company is liable to tax and can profoundly affect group effective tax rates. It is not enough to incorporate in a particular jurisdiction; tax authorities look to where substantive decisions are made and where effective management occurs. Failure to organise and document board processes properly can lead to unexpected dual residence, exit charges, loss of treaty benefits and HMRC challenges. This course provides practical guidance on how to structure and evidence board governance to maintain residence, drawing on key case law and treaty provisions. Participants will leave equipped to design robust protocols, analyse existing structures and confidently manage residence risk within their organisations.