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An international group may contain a finance company that satisfies the residence rules of two countries at the same time. If that company incurs a loss the group may obtain relief for that loss twice by surrender of group relief in both countries.

When an asset is transferred from one company to another company in the same group or under the same ultimate control, there are several provisions in the Taxes Acts which determine the amount of the consideration to be taken into the computation of capital allowances or capital gains. Some of these provisions allow a potential balancing charge, or a chargeable gain to be rolled over and effectively deferred until the asset is sold to an unconnected person.

A multinational group could therefore arrange, by transferring assets to a dual resident investing company, for balancing charges and chargeable gains to arise in that company,