The UK has historically been a popular holding company location as a commercial gateway to Europe.
From a tax perspective, there is a strong treaty network, a dividend exemption, an exemption from capital gains on disposal of shares, and no WHT on dividends, although the previously high headline rates and complex legislation has deterred some groups.
Commercially, the UK offers stability, both politically and economically, and has extensive links with the rest of Europe. Whilst the UK work force is well educated, the level of linguistic skills is often limited to English. The key sectors for the UK include construction and property, financial services and media and entertainment.
With a free health service and good schools it can attract high-caliber expatriates. As the cost of living in the South is high, expatriates will expect high remuneration packages. In terms of IP, the UK has a favorable, Although complex, R&D tax regime which offers generous tax deductions and credits, the magnitude of which depends on the size of the group. This is currently under review and it is expected that the regime will be changed with effect from April 2013 to be more favorable for larger groups.
The headline rate of corporation tax is 24% from 1 April 2012 (26% prior to this date). The Government has announced its intention to reduce this by 1% each year for the next two years bringing this down to 22% by 1 April 2014.
Source - Grant Thornton