Corporate residence turns on actual central management and control, even when exercised contrary to constitutional arrangements.

A company's residence for income tax purposes is determined by where its central management and control are in fact exercised, not by the place contemplated in its constitution. The factual inquiry remains decisive even if the management is conducted irregularly or contrary to the company's articles. On the evidence, the boards of the subsidiaries stood aside and real control was exercised by the parent company's board in London, so the residence test was satisfied by de facto direction. The statutory provision cited was treated as consistent with that principle.

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Issues: Whether a company's residence for income tax purposes is determined by the place where its central management and control are actually exercised, even if that management is exercised in a manner inconsistent with the company's constitution; and whether the commissioners' finding that the real control and management were exercised in London entitled the appellant to deduct the payments under the relevant tax provision.

Analysis: The governing principle remained that a company resides where its real business is carried on, meaning where its central management and control actually abides. The fact that the subsidiaries' articles contemplated management outside the United Kingdom did not displace the factual inquiry into where the business was in truth directed. The commissioners had found, on the evidence, that the boards of the African subsidiaries were standing aside and that the real control and management was exercised by the parent company's board in London. That finding was treated as a proper factual conclusion, and the irregularity or unauthorised nature of the management did not prevent it from being relevant to residence for tax purposes. The statutory recognition in section 468(7) of the Income Tax Act, 1952, was consistent with that approach.

Conclusion: The companies were resident in the United Kingdom for the relevant tax purposes, despite the constitutional provisions pointing elsewhere, and the appellant was entitled to succeed.

Final Conclusion: The appeal succeeded because actual de facto central management and control, not the place where management ought constitutionally to have been exercised, determined corporate residence for the tax issue.

Ratio Decidendi: For income tax purposes, a company's residence is fixed by the place where its central management and control are in fact exercised, and that factual inquiry is not displaced merely because the management is conducted contrary to the company's constitutional arrangements.

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