Taxation (International and Other Provisions) Act 2010 Schedule 7 Part 10

Relocation of sections 130 to 132 of FA 1988 (paragraphs 53–56)

Schedule 7 Part 10 deals with the rules that secure payment of outstanding tax when a company ceases to be UK resident, by relocating and updating the former FA 1988 provisions into new sections 109B to 109F of the Taxes Management Act 1970.

• A company must notify HMRC of its intention to leave UK residence, state the planned migration time, declare its estimated outstanding tax, and have HMRC-approved arrangements in place to pay that tax before it ceases to be UK resident.
• If a company migrates without meeting all four conditions, it faces a penalty of up to the amount of unpaid tax; directors, controlling companies, and persons who knowingly facilitated the non-compliant migration can also be penalised up to the same amount.
• Where a migrating company's pre-migration tax remains unpaid for more than six months, HMRC can serve a notice on group companies, controlling directors, or directors of controlling companies requiring them to pay the outstanding amount within 30 days, with recovery rights against the migrating company.
• "Tax" for these purposes is broadly defined to include PAYE, construction industry deductions, amounts due under the territorial extension of charge, and certain other income tax obligations, together with any related interest.