Robert Langston provides your refresher guide to the UK tax rules for classifying foreign entities.
This article outlines how foreign entities are classified for UK tax purposes and the implications of this classification. Broadly speaking an entity may be transparent or opaque and this will usually be determined on the basis of case law. This article also outlines how distributions from foreign entities are classified and some planning opportunities which arise where entities are classified differently in two jurisdictions.
Classification of foreign entities
UK legislation provides little guidance on whether a foreign entity is to be treated as transparent or opaque for UK tax purposes but the UK courts have considered this issue on several occasions.
In Dreyfus...
