A company incorporated in Bermuda was UK tax resident because its strategic decisions were effectively made by a UK-based individual, the First-tier Tribunal has held in Cogefin (Bermuda) Limited and Giuseppe Ciardi v HMRC [2026] UKFTT 01108 (TC).
The decision, dated 30 July 2026, highlights the importance of how an overseas company is actually managed. Incorporation abroad and the appointment of locally resident directors did not establish that central management and control was exercised outside the UK.
Cogefin was owned by a family trust of which Mr Ciardi was the economic settlor and a beneficiary. Its directors were Bermuda-resident lawyers. The company held investments and funded a range of transactions, including projects connected with Mr Ciardi and assets acquired for his personal use.
Following a disclosure made on Mr Ciardi’s behalf under the Liechtenstein Disclosure Facility, HMRC investigated the company’s residence and issued corporation tax assessments covering accounting periods from 1999 to 2017, together with penalties for failure to notify chargeability.
The taxpayers maintained that the Bermuda directors controlled Cogefin and that Mr Ciardi acted only as an investment adviser. After a four-week hearing and a detailed examination of extensive documentary evidence, the Tribunal rejected that position.
It found that the directors generally implemented Mr Ciardi’s proposals without exercising the independent strategic judgment required for central management and control. Their involvement largely consisted of checking that transactions could proceed and that sufficient funds were available.
The Tribunal also found that the directors blurred the distinction between Cogefin and the trust that owned it. They treated Mr Ciardi’s proposals as instructions from a beneficial owner, rather than recommendations requiring a separate corporate decision. On the evidence, the directors had effectively surrendered decision-making responsibility to him.
Cogefin was therefore UK resident throughout the periods under appeal. Its appeal against residence and the validity of the associated assessments was dismissed.
The outcome on penalties was different. The Tribunal found a substantial failure to consider the company’s tax position, but no intentional attempt to mislead HMRC. The conduct amounted to a failure to take reasonable care rather than deliberate behaviour.
The company’s penalty appeal was consequently allowed in part, with the Tribunal setting the applicable penalty percentage at 25% of potential lost revenue. The final monetary amounts remained to be agreed or determined.
Mr Ciardi’s appeal against his personal liability notice was allowed. The statutory provision relied on required deliberate conduct, which the Tribunal had not found.
For overseas companies with UK-connected shareholders, beneficiaries or advisers, the case illustrates the importance of genuine board decision-making. Directors must assess proposals and exercise their own judgment in practice. Formal approvals and administrative checks alone may provide little support for an overseas residence position where the evidence shows that strategic control rests in the UK.
Case reference: Cogefin (Bermuda) Limited and Giuseppe Ciardi v HMRC [2026] UKFTT 01108 (TC), TC09969, 30 July 2026.