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Locating your Holding Company in the UK

Tax Position for the ‘ideal’ holding Co.

  • Dividends paid by subsidiary companies are subject to reduced or nil rates of withholding tax.
  • Holding company is not subject to tax on dividend income received.
  • Dividends paid out by holding company are not subject to withholding tax.
  • Sales of shares in subsidiary companies are tax free.

(In the UK it is possible to achieve all of these aims).

  UK Holland Germany Australia USA
Withholding tax dividends* nil 5-15% Up to 25% Up to 30% 30%
Corporate taxes** 20% 20-25% 30-33% 30% 15-35%

*With the exception of the UK, all rates vary depending upon tax treaties and other conditions, and level of shareholding.

**Rates given will vary depending on location, size of company etc.

The tax treatment of international transactions is a complex issue – professional advice should always be sought.

How the UK fits that model


Dividends can be received from most countries in the world at competitive rates of withholding taxes. This is due to the UK’s extensive Tax Treaty network. Where withholding tax is deducted, tax relief may be available.
UK companies are not normally taxable on dividends received from subsidiaries in any jurisdiction, subject to certain conditions and limitations.

Capital income

No Capital Gains Tax on sale of shares in a subsidiary (provided more than 10% ownership, and subject to some further restrictions).
Due to its extensive tax treaty network, the UK can also provide very competitive rates of withholding taxes on interest and royalties. Consideration must be given to non-conduit clauses in certain of the tax treaties.

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