Offshore directors and board minutes are not enough if strategic decisions are taken in the UK.
In Cogefin (Bermuda) Ltd and another v HMRC [2026] UKFTT 1108 (TC), the FTT held that a Bermudian company was UK resident because its central management and control (CMC) was exercised by Mr Ciardi (C) from the UK, notwithstanding Bermudian directors, board minutes and formal offshore governance.
Cogefin, incorporated in 1996, was ultimately owned by the trustees of the Poole Family Trust. C was the trust’s economic settlor and beneficiary. HMRC had issued discovery assessments for corporation tax covering accounting periods spanning 1999 to 2017.
Having reviewed a chronological bundle running to more than 20,000 pages, the FTT found that C made the relevant strategic decisions and that Cogefin’s Bermudian directors implemented his proposals, generally without applying their minds to them.
Practical implications: Cogefin is the latest, and one of the starkest, illustrations of a theme running through the CMC case law since Untelrab [1996] STC (SCD) 1 and Wood v Holden [2006] EWCA Civ 26: formal governance can look impeccable on paper and still not survive scrutiny of what actually happened. On paper, Cogefin had much of what one could expect a well-advised structure to have, namely: non-resident directors who were qualified lawyers, board minutes recording resolutions of decisions having been made outside the UK, and an investment adviser whose role was ostensibly confined to making recommendations. In substance, the FTT found that none of that machinery reflected where the real decisions were taken.
Three failures in particular stand out as lessons for anyone advising on offshore residence, precisely because each is avoidable:
Sequencing: The FTT treated funds being released and a board resolution being dated retrospectively and before the underlying documentation had been reviewed as powerful evidence that no genuine decision had been taken at all. A board that authorises a transaction after the money has already moved is not exercising CMC; it is recording something that has already happened. This is a more concrete, evidentially dangerous version of the ‘rubber stamping’ concern that also proved fatal in HMRC v Development Securities plc [2020] EWCA Civ 1705, where Jersey directors who had met, understood the proposal and had taken advice were nevertheless found not to have engaged with the substantive decision itself.
Language and self-perception: The FTT placed real weight on the fact that Cogefin’s directors habitually described themselves, and were described by others, as ‘trustees’ rather than directors, and that they treated C’s proposals as instructions from a beneficiary rather than recommendations from an adviser. How a board describes its own function in contemporaneous correspondence is not a technicality; it is evidence of what the board actually understood its job to be.
The character of engagement: The FTT accepted a director’s own description of the board’s role as a ‘sense check’ confirming that funds were available and that nothing was obviously improper. This fell short of the strategic decision-making CMC requires; at best it was an administrative function (at [306]). That finding echoes the FTT decision in Laerstate BV v HMRC [2009] UKFTT 209 (TC), where a co-director’s activities were found to be ‘limited to signing documents when told to do so’. In that case, the FTT held that CMC lay with the dominant shareholder-director who actually made the decisions, not with the director who merely executed them. Cogefin shows that a board can go further than Laerstate’s passive signatory such that holding board meetings, keeping (albeit not always reliable) minutes and employing genuinely independent professionals could still fall on the wrong side of the line if the board’s engagement with each proposal never goes beyond checking that something can be done, rather than deciding whether it should be done.
For practitioners, the practical message is less about documentation than about substance. A board’s paper trail will not save a residence position if the underlying pattern, however well the individual minutes read in isolation, shows decisions being taken elsewhere, and merely implemented or checked by the board. Advisers reviewing or setting up an offshore structure should test whether directors can be shown engaging with the merits of each material proposal, and occasionally saying no or asking substantive questions, rather than simply confirming that a proposal already agreed elsewhere can be funded and is not obviously improper. Where an adviser’s or a beneficiary’s recommendations are, over many years, ‘routinely sought and followed’ without any recorded pushback, that pattern (not any single transaction) is what is likely to attract the scrutiny of HMRC, and potentially, as happened in this case, that of the FTT.
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Corporate residence: beyond the paperwork
Offshore directors and board minutes are not enough if strategic decisions are taken in the UK.
In Cogefin (Bermuda) Ltd and another v HMRC [2026] UKFTT 1108 (TC), the FTT held that a Bermudian company was UK resident because its central management and control (CMC) was exercised by Mr Ciardi (C) from the UK, notwithstanding Bermudian directors, board minutes and formal offshore governance.
Cogefin, incorporated in 1996, was ultimately owned by the trustees of the Poole Family Trust. C was the trust’s economic settlor and beneficiary. HMRC had issued discovery assessments for corporation tax covering accounting periods spanning 1999 to 2017.
Having reviewed a chronological bundle running to more than 20,000 pages, the FTT found that C made the relevant strategic decisions and that Cogefin’s Bermudian directors implemented his proposals, generally without applying their minds to them.
Practical implications: Cogefin is the latest, and one of the starkest, illustrations of a theme running through the CMC case law since Untelrab [1996] STC (SCD) 1 and Wood v Holden [2006] EWCA Civ 26: formal governance can look impeccable on paper and still not survive scrutiny of what actually happened. On paper, Cogefin had much of what one could expect a well-advised structure to have, namely: non-resident directors who were qualified lawyers, board minutes recording resolutions of decisions having been made outside the UK, and an investment adviser whose role was ostensibly confined to making recommendations. In substance, the FTT found that none of that machinery reflected where the real decisions were taken.
Three failures in particular stand out as lessons for anyone advising on offshore residence, precisely because each is avoidable:
Sequencing: The FTT treated funds being released and a board resolution being dated retrospectively and before the underlying documentation had been reviewed as powerful evidence that no genuine decision had been taken at all. A board that authorises a transaction after the money has already moved is not exercising CMC; it is recording something that has already happened. This is a more concrete, evidentially dangerous version of the ‘rubber stamping’ concern that also proved fatal in HMRC v Development Securities plc [2020] EWCA Civ 1705, where Jersey directors who had met, understood the proposal and had taken advice were nevertheless found not to have engaged with the substantive decision itself.
Language and self-perception: The FTT placed real weight on the fact that Cogefin’s directors habitually described themselves, and were described by others, as ‘trustees’ rather than directors, and that they treated C’s proposals as instructions from a beneficiary rather than recommendations from an adviser. How a board describes its own function in contemporaneous correspondence is not a technicality; it is evidence of what the board actually understood its job to be.
The character of engagement: The FTT accepted a director’s own description of the board’s role as a ‘sense check’ confirming that funds were available and that nothing was obviously improper. This fell short of the strategic decision-making CMC requires; at best it was an administrative function (at [306]). That finding echoes the FTT decision in Laerstate BV v HMRC [2009] UKFTT 209 (TC), where a co-director’s activities were found to be ‘limited to signing documents when told to do so’. In that case, the FTT held that CMC lay with the dominant shareholder-director who actually made the decisions, not with the director who merely executed them. Cogefin shows that a board can go further than Laerstate’s passive signatory such that holding board meetings, keeping (albeit not always reliable) minutes and employing genuinely independent professionals could still fall on the wrong side of the line if the board’s engagement with each proposal never goes beyond checking that something can be done, rather than deciding whether it should be done.
For practitioners, the practical message is less about documentation than about substance. A board’s paper trail will not save a residence position if the underlying pattern, however well the individual minutes read in isolation, shows decisions being taken elsewhere, and merely implemented or checked by the board. Advisers reviewing or setting up an offshore structure should test whether directors can be shown engaging with the merits of each material proposal, and occasionally saying no or asking substantive questions, rather than simply confirming that a proposal already agreed elsewhere can be funded and is not obviously improper. Where an adviser’s or a beneficiary’s recommendations are, over many years, ‘routinely sought and followed’ without any recorded pushback, that pattern (not any single transaction) is what is likely to attract the scrutiny of HMRC, and potentially, as happened in this case, that of the FTT.
