Significantly though the UK has a very favourable tax regime for the receipt of dividends from subsidiaries and onward payment to shareholders.
Notably, dividends received on ordinary shares from an overseas subsidiary are exempt from corporation tax. A UK company can pay out dividends to shareholders located anywhere in the world free of any withholding tax. This applies to both corporate and personal shareholders.
A disposal of shares in a trading subsidiary is also free from corporation tax, providing certain ownership and trading conditions are met.
As a member of the EU and thus party to EU Parent/Subsidiary Directive and the Interest and Royalties Directive most interest and royalties can be paid and received between the UK and other EU members free of withholding tax. In addition the UK has one of the most extensive double tax treaty networks globally allowing for reduced rates of withholding taxes on payments to many countries around the world.
This combined set of measures ensures the UK is a particular attractive gateway for businesses wanting to expand into Europe.