In GE Financial Investments Ltd, the Court of Appeal has overturned
the Upper Tribunal’s decision that the taxpayer was entitled to treaty
relief. It held that the taxpayer being subject to worldwide taxation as a
result of a US rule on stapled shares wasn’t enough, and that a further
direct link to the US was required. The court favoured something like
the territorial interpretation. The difficulty remains, however, that this
interpretation does require the court to look at precisely how the state
imposes tax. Such difficulties are hopefully solved by a future court
looking to an international fiscal meaning of ‘residence’.