GE Financial Investments: What Determines Residency?

Background

In GE Financial Investments Limited¹ the Court of Appeal ("CoA") overturned the Upper Tribunal's ("UT") decision and held that double taxation relief was not available under the UK-US double tax treaty (the "Treaty"). We covered the UT's decision in August 2023.² We have briefly summarised the facts of the case below. GE Financial Investments Ltd ("GEFI Limited") was a UK incorporated and tax resident company, subject to UK tax on its worldwide income. GEFI Limited had a sister group company, GE Financial Investments Inc. ("GEFI US"), which was incorporated in the US. GEFI Limited and GEFI US were members of a Delaware-established limited partnership (the "LP"). The shares in GEFI Limited were stapled to the common stock of GEFI US. The stapling meant that GEFI Limited was treated for US tax purposes as a 'domestic corporation' and subject to US tax on its worldwide income. The question was whether GEFI Limited was also US resident for the purposes of