Residence and UK Nexus
You should check the other guidance available on GOV.UK from HMRC as Brexit updates to those pages are being prioritised before manuals.
In order to be an intermediary under the Directive, a person must meet one of the following conditions:
- It is resident for tax purposes in an EU Member State,
- It has a permanent establishment in an EU Member State, through which it provides the services with respect to the arrangement,
- It is incorporated in an EU Member State, or governed by the laws of an EU Member State, or
- It is registered with a professional association relating to legal, taxation or consultancy services in an EU Member State
As a result of the amendments in SI 2020/1649, references in the Directive to a ‘member state’ are to be read as if they were references to a ‘state’, where ‘state’ is defined as being the UK or an EU member state. Consequently if an intermediary meets any of the criteria above in relation to the UK, it will be a UK intermediary.
An intermediary will therfore have to make a report to HMRC if it meets any of the following conditions:
- It is resident for tax purposes in the UK,
- It has a permanent establishment in the UK, through which it provides the services with respect to the arrangement,
- It is incorporated in the UK, or governed by the laws of the UK, or
- It is registered with a professional association relating to legal, taxation or consultancy services in the UK.
An intermediary who meets one of these four conditions is defined in regulation 2(1) as being a UK intermediary. It is UK intermediaries who have reporting obligations under regulation 3(1) (see IEIM650000).
For more details on the application of these rules to those who meet the fourth bullet point by virtue of being registered with a professional association in the UK, please see IEIM621140