American owners of UK corporations
Since 2018, there has been a potential Global Intangible Low Taxed Income (GILTI) consideration for certain American owners of foreign companies, which is an additional tax on US owners of foreign companies. There is scope in the US to make a “check the box” election or a s962 election to mitigate the GILTI tax.
However, with the UK corporation tax rate set to increase to 25% from 5 April 2023 there could be more scope for making use of the GILTI High-Tax Exclusion to exempt the profits from this additional tax. There will be a small profits rate of 19% (profits of up to £50,000) and a tapered rate for profits in between £50,000 and £250,000, so there may still be a need for “check the box” elections or s962 election in certain cases depending on the individual facts and circumstances.