The diversion of profits leg of the motive test deals with controlled foreign companies which are used to reduce United Kingdom tax but which may not undertake transactions which achieve a reduction in UK tax as defined by ICTA88/SCH25/PARA17. For example, the only transaction which a moneybox company might undertake in an accounting period is to deposit its funds at interest in a bank account. The only transactions it might be involved with might be:
•the subscription of shares in it by the UK parent; and
•the deposit of the funds from the subscription at interest in an offshore bank account.