Controlled foreign companies (CFCs)

40 per cent test

Legislation/Regulatory – FA2000 Sch. 31, para. 9

Acceptable distribution policy

Accounting periods straddling 1 July 2009

Legislation/Regulatory – FA2009 Sch. 16, para. 7

HMRC Guidance – INTM655030

Long term insurance business/large risk insurance

Legislation/Regulatory – ICTA88 Sch. 25, para. 6(2B), 11A, 11B

HMRC Guidance – GIM11190 ; INTM254810 ; INTM254830 ; INTM254840 ; INTM254850 ; INTM254880 ; INTM254890 ; INTM254900 ; INTM254910 ; INTM254930 ; INTM254940 ; INTM254950 ; INTM254960 ; INTM254970 ; INTM255000 ; INTM255020 ; INTM255030 ; INTM255050 ; INTM256730

Transitional provisions

Legislation/Regulatory – FA2009 Sch. 16, para. 8

Accounting period

Commentary – Tax Reporter ¶767-720

Accounting periods

Beginning on or after 1 January 2013

Legislation/Regulatory – FA2012 Sch. 20, para. 49

Generally

Legislation/Regulatory – FA2008 s. 64(9)-(11) ; TIOPA2010 s. 371VB

Pre-1 January 2012

Legislation/Regulatory – FA2012 Sch. 20, para. 50-54

Transitional provisions

Legislation/Regulatory – FA2012 Sch. 20, para. 56

Accounting profits

Adjustments to

Legislation/Regulatory – TIOPA2010 s. 371VD

Generally

Legislation/Regulatory – TIOPA2010 s. 371VC

Advance corporation tax

Surrender

Legislation/Regulatory – FA98 Sch. 3, para. 43

Unrelieved surplus set-off

Legislation/Regulatory – FA98 s. 32(5) ; SI 1999/358 reg. 20

Advances made, meaning

Legislation/Regulatory – ICTA88 Sch. 25, para. 11(5)

HMRC Guidance – INTM254890 ; INTM254900 ; INTM254910

Appeals affecting more than one person

Legislation/Regulatory – TIOPA2010 s. 371UE

Apportionment of chargeable profits and creditable tax

Anti-avoidance

Commentary – Tax Reporter ¶769-960

Anti-avoidance provisions

Legislation/Regulatory – TIOPA2010 s. 371QG

Basic rules

Legislation/Regulatory – TIOPA2010 s. 371QC

Generally

Legislation/Regulatory – FA2000 Sch. 31, para. 9 ; TIOPA2010 s. 371QA

In proportion to ordinary shareholdings

Legislation/Regulatory – TIOPA2010 s. 371QD

Indirect shareholdings

Commentary – Tax Reporter ¶769-920

Legislation/Regulatory – TIOPA2010 s. 371QE

Interest in a company

Commentary – Tax Reporter ¶769-900

Interests held by UK resident companies/related persons

Commentary – Tax Reporter ¶769-880

Interpretation

Legislation/Regulatory – TIOPA2010 s. 371QB

Relevant interest, determination

Commentary – Tax Reporter ¶769-880

Variable shareholdings

Commentary – Tax Reporter ¶769-940

Legislation/Regulatory – TIOPA2010 s. 371QF

Arbitrage rules

Legislation/Regulatory – FA2013 Sch. 47, para. 15 ; TIOPA2010 s. 236(4)

Arrangement, meaning

Commentary – Tax Reporter ¶767-180

Arrangements for paying tax on behalf of group members

Legislation/Regulatory – TMA70 s. 59F

Assessments

Legislation/Regulatory – FA98 Sch. 18, para. 44(3)

Associated persons

Legislation/Regulatory – TIOPA2010 s. 371VF

Associated, meaning

Commentary – Tax Reporter ¶767-180

Assumed close company

Legislation/Regulatory – ICTA88 Sch. 24, para. 3

HMRC Guidance – INTM255680

Assumed election

Legislation/Regulatory – ICTA88 Sch. 24, para. 4

HMRC Guidance – CFM64550 ; GIM6390 ; INTM255690 ; INTM255700 ; INTM255720 ; INTM255730 ; INTM255740 ; INTM255750 ; INTM255820 ; INTM256660

Assumed residence

Legislation/Regulatory – ICTA88 Sch. 24, para. 1, 2

HMRC Guidance – INTM167460 ; INTM255620 ; INTM255630 ; INTM255640 ; INTM255670 ; INTM255690 ; INTM255700 ; INTM255750 ; INTM255830 ; INTM256370 ; INTM256380

Background to new rules

Commentary – Tax Reporter ¶767-010

Banking and similar business

Legislation/Regulatory – FA2000 Sch. 31, para. 9 ; ICTA88 Sch. 25, para. 11

HMRC Guidance – INTM254890 ; INTM254900 ; INTM254910

Banking business profits

Commentary – Tax Reporter ¶769-040

Banking business, meaning

Commentary – Tax Reporter ¶767-180

Business establishment, meaning

Legislation/Regulatory – ICTA88 Sch. 25, para. 7(1)

HMRC Guidance – INTM256070

Capital allowances

– see also Capital allowances

Generally

Legislation/Regulatory – ICTA88 Sch. 24, para. 10 ; TIOPA2010 s. 371SM

Capital interest, meaning

Legislation/Regulatory – ICTA88 Sch. 25, para. 11(4)

HMRC Guidance – INTM254890 ; INTM254900 ; INTM254910

Captive insurance business

Commentary – Tax Reporter ¶768-670 ; Tax Reporter ¶769-090

Captive insurance companies (CFC charge gateway), basic rule

Legislation/Regulatory – TIOPA2010 s. 371GA

Captive insurance companies, motive test

Case Law – Association of British Travel Agents Ltd v IR Commrs (2002) Sp C 359

Cell companies

Commentary – Tax Reporter ¶767-220

Legislation/Regulatory – TIOPA2010 s. 371VE

Change of accounting basis, mark to market

Legislation/Regulatory – FA2002 s. 65, 66

Charge (CFC charge)

Accounting period

Commentary – Tax Reporter ¶767-720

Basic life insurance and general annuity business (BLAGAB)

Commentary – Tax Reporter ¶767-700

Chargeable companies

Legislation/Regulatory – TIOPA2010 s. 371BD

Chargeable profits

Commentary – Tax Reporter ¶767-975–Tax Reporter ¶768-260

Creditable tax

Commentary – Tax Reporter ¶767-740

Determination, series of steps

Legislation/Regulatory – FA98 Sch. 18, para. 8 ; TIOPA2010 s. 371BC ; TMA70 s. 59E(11), 59F(6)

Gateway

Legislation/Regulatory – TIOPA2010 s. 371BB

General rules

Commentary – Tax Reporter ¶767-100 ; Tax Reporter ¶767-600

Generally

Commentary – Tax Reporter ¶767-600

Holding shares as trading assets etc.

Legislation/Regulatory – TIOPA2010 s. 371BG

Imposition

Legislation/Regulatory – TIOPA2010 s. 371BA

Insurance companies carrying on BLAGAB

Legislation/Regulatory – TIOPA2010 s. 371BH

Method for making

Commentary – Tax Reporter ¶767-620–Tax Reporter ¶767-700

Offshore fund managers

Legislation/Regulatory – TIOPA2010 s. 371BE

Offshore funds

Commentary – Tax Reporter ¶767-640 ; Tax Reporter ¶767-660

Participators in offshore funds

Legislation/Regulatory – TIOPA2010 s. 371BF

Recovery of sum charges

Commentary – Tax Reporter ¶767-700

Relief for relevant allowance

Commentary – Tax Reporter ¶767-760

Shares held as trading assets

Commentary – Tax Reporter ¶767-680

Charge gateway (CFC charge gateway)

Application of provisions

Commentary – Tax Reporter ¶768-730–Tax Reporter ¶769-100

Captive insurance business

Commentary – Tax Reporter ¶768-670 ; Tax Reporter ¶769-090

Legislation/Regulatory – TIOPA2010 s. 371CF

Exempt distribution income

Legislation/Regulatory – TIOPA2010 s. 371CC

Generally

Commentary – Tax Reporter ¶767-100 ; Tax Reporter ¶768-510

Legislation/Regulatory – TIOPA2010 s. 371BB

Group treasury companies

Commentary – Tax Reporter ¶768-710

Non-trading finance profits

Commentary – Tax Reporter ¶768-555–Tax Reporter ¶768-630

Legislation/Regulatory – TIOPA2010 s. 371CB-371CD

Profits attributable to UK activities

Commentary – Tax Reporter ¶768-530 ; Tax Reporter ¶768-730–Tax Reporter ¶768-830

Legislation/Regulatory – TIOPA2010 s. 371CA, 371DA-371DL

Solo consolidation

Commentary – Tax Reporter ¶768-690 ; Tax Reporter ¶769-100

Legislation/Regulatory – TIOPA2010 s. 371GG

Trading finance profits

Commentary – Tax Reporter ¶768-655 ; Tax Reporter ¶769-040–Tax Reporter ¶769-100

Legislation/Regulatory – FA2013 Sch. 47, para. 17, 22 ; TIOPA2010 s. 371CE

Trading or property business profits

Legislation/Regulatory – TIOPA2010 s. 371CC

Chargeable profits

Apportionment

Commentary – Tax Reporter ¶769-860–Tax Reporter ¶769-960

Legislation/Regulatory – TIOPA2010 s. 371QA-371QG

Assumed taxable total profits, meaning

Commentary – Tax Reporter ¶767-985

Assumed total profits, meaning

Commentary – Tax Reporter ¶767-985

Assumptions for calculation

Legislation/Regulatory – ICTA88 Sch. 24, para. 1

Corporation tax assumptions

Commentary – Tax Reporter ¶768-010–Tax Reporter ¶768-260

Dividends

Legislation/Regulatory – ICTA88 Sch. 26, para. 4-6

HMRC Guidance – INTM255830 ; INTM256220 ; INTM256230 ; INTM256240 ; INTM256260 ; INTM256270 ; INTM256280 ; INTM256290 ; INTM256300 ; INTM256310

Generally

Commentary – Tax Reporter ¶767-975

Legislation/Regulatory – FA2000 Sch. 31, para. 9

Just and reasonable apportionments

Legislation/Regulatory – TIOPA2010 s. 371UC

Commencement of new regime

Commentary – Tax Reporter ¶767-140

Common terms

Commentary – Tax Reporter ¶767-180

Company reconstructions

Legislation/Regulatory – ICTA88 Sch. 24, para. 8

HMRC Guidance – INTM255810

Compatibility of national legislation with EU law

Generally

Case Law – Revenue & Customs Commissioners v Vodafone 2. [2006] BTC 406 ; Vodafone 2 v R & C Commrs (2005) Sp C 479

Reference to ECJ, special commissioners' power to make

Case Law – Revenue and Customs Commissioners v Vodafone 2. [2006] BTC 702

Restriction of freedom of establishment

Case Law – Vodafone 2 v Revenue and Customs Commissioners. [2008] BTC 526 ; Vodafone 2 v Revenue and Customs Commissioners. [2009] BTC 273 ; Vodafone 2 v. R & C Commrs (2007) Sp C 622

Connected persons

Legislation/Regulatory – TIOPA2010 s. 371VF

Connected, meaning

Commentary – Tax Reporter ¶767-180

Control, meaning

Accounting periods, reference to

Legislation/Regulatory – TIOPA2010 s. 371RE, 371RF

Accounting test

Commentary – Tax Reporter ¶767-380

Economic test

Commentary – Tax Reporter ¶767-380

Generally

Legislation/Regulatory – FA2000 Sch. 31, para. 9 ; TIOPA2010 s. 371RA

Legal and economic control

Legislation/Regulatory – TIOPA2010 s. 371RB-371RD

Legal test

Commentary – Tax Reporter ¶767-380

Parent undertaking

Commentary – Tax Reporter ¶767-440

Subsidiary undertaking

Commentary – Tax Reporter ¶767-440

Three mechanical tests

Commentary – Tax Reporter ¶767-380

Two or more persons

Commentary – Tax Reporter ¶767-430

Corporation tax assumptions

Assumed taxable total profits

Legislation/Regulatory – TIOPA2010 s. 371SB

Assumed total profits

Legislation/Regulatory – TIOPA2010 s. 371SB

Capital allowances

Commentary – Tax Reporter ¶768-160

Legislation/Regulatory – TIOPA2010 s. 371SM

Claims and elections

Commentary – Tax Reporter ¶768-060

Legislation/Regulatory – TIOPA2010 s. 371SF, 371SG

Close company status

Commentary – Tax Reporter ¶768-040

Close company, assumed not to be

Legislation/Regulatory – TIOPA2010 s. 371SE

Designated currency election

Commentary – Tax Reporter ¶768-080

Designated currency, elections

Legislation/Regulatory – FA2012 Sch. 20, para. 57 ; TIOPA2010 s. 371SH, 371SI

Disguised interest

Legislation/Regulatory – TIOPA2010 s. 371SP

Disguised interest provisions

Commentary – Tax Reporter ¶718-400 ; Tax Reporter ¶768-220

Double taxation relief

Commentary – Tax Reporter ¶768-260

Legislation/Regulatory – TIOPA2010 s. 371SR

Generally

Commentary – Tax Reporter ¶768-010

Group relief

Commentary – Tax Reporter ¶768-140

Legislation/Regulatory – TIOPA2010 s. 371SL

Intangible fixed assets

Commentary – Tax Reporter ¶768-120

Legislation/Regulatory – TIOPA2010 s. 371SK

Leases treated as long funding leases, elections

Legislation/Regulatory – TIOPA2010 s. 371SJ

Long funding leases, election for leases to be treated as

Commentary – Tax Reporter ¶768-100

Meaning

Legislation/Regulatory – TIOPA2010 s. 371SC

Shares accounted for as liabilities

Legislation/Regulatory – TIOPA2010 s. 371SQ

Shares accounted for as liabilities provisions

Commentary – Tax Reporter ¶768-240

Tax advantage, arrangements to obtain

Legislation/Regulatory – TIOPA2010 s. 371SO

Tax advantage, arrangements to secure

Commentary – Tax Reporter ¶768-190

UK residence

Commentary – Tax Reporter ¶768-020

Legislation/Regulatory – TIOPA2010 s. 371SD

Unremittable overseas income

Commentary – Tax Reporter ¶768-180

Legislation/Regulatory – TIOPA2010 s. 371SN

Costs of purchasing property

Legislation/Regulatory – ICTA88 Sch. 25, para. 11(2)

HMRC Guidance – INTM254890 ; INTM254900 ; INTM254910

Creditable tax

Apportionment

Commentary – Tax Reporter ¶769-860–Tax Reporter ¶769-960

Legislation/Regulatory – TIOPA2010 s. 371QA-371QG

Generally

Commentary – Tax Reporter ¶767-740

Just and reasonable apportionments

Legislation/Regulatory – TIOPA2010 s. 371UC

Meaning

Legislation/Regulatory – TIOPA2010 s. 371PA

Deemed lower level of taxation

Legislation/Regulatory – FA2000 Sch. 31, para. 9 ; SI 2000/3158

Definitions

Legislation/Regulatory – TIOPA2010 s. 371VA

Designated currency election

Commentary – Tax Reporter ¶768-080

Designer rate tax provisions

Commentary – Tax Reporter ¶769-720

Legislation/Regulatory – FA2000 Sch. 31, para. 9 ; FA2012 Sch. 20, para. 59 ; SI 2000/3158 ; TIOPA2010 s. 371ND

Discovery assessment

Generally

Legislation/Regulatory – FA98 Sch. 18, para. 44(3)

Meaning

Legislation/Regulatory – TIOPA2010 s. 371UA

Disguised interest

Legislation/Regulatory – CTA2009 s. 486E(9), (10) ; TIOPA2010 s. 371SP

Disguised interest provisions

Commentary – Tax Reporter ¶768-220

Distributions received from

Legislation/Regulatory – CTA2009 s. 931CA, 931E(3)

Distributive business

Legislation/Regulatory – ICTA88 Sch. 25, para. 11

Diversion of profits

Legislation/Regulatory – ICTA88 Sch. 25, para. 16-19

HMRC Guidance – INTM255180 ; INTM255190 ; INTM255200 ; INTM255230 ; INTM255240 ; INTM255250 ; INTM255280 ; INTM255290 ; INTM255300 ; INTM255310 ; INTM255340 ; INTM255350 ; INTM255360 ; INTM255370 ; INTM255380 ; INTM255390 ; INTM255400 ; INTM255420 ; INTM255500

Diversion of tax

Legislation/Regulatory – ICTA88 Sch. 25, para. 19

Dividends

Case Law – Test Claimants in the CFC and Dividend Group Litigation v Inland Revenue Commissioners (Case C-201/05). [2008] BTC 574

Double taxation relief

– see Double taxation relief (companies)

Election

Legislation/Regulatory – ICTA88 Sch. 24, para. 4

Enquiry closure notice, meaning

Legislation/Regulatory – TIOPA2010 s. 371UA

Entity-level exemptions

Excluded territories exemption

Commentary – Tax Reporter ¶769-740–Tax Reporter ¶769-780

Exempt period exemption

Commentary – Tax Reporter ¶769-420–Tax Reporter ¶769-540

Generally

Commentary – Tax Reporter ¶767-100 ; Tax Reporter ¶769-400

Low profit margin exemption

Commentary – Tax Reporter ¶769-620

HMRC Guidance – INTM225800

Low profits exemption

Commentary – Tax Reporter ¶769-560–Tax Reporter ¶769-620

HMRC Guidance – INTM225800

Tax exemption

Commentary – Tax Reporter ¶769-640–Tax Reporter ¶769-720

Euroconversion

Legislation/Regulatory – SI 1998/3177 reg. 40

Exchange gains and losses

Legislation/Regulatory – FA95 Sch. 25, para. 6 ; SI 1994/3227 reg. 6

Excluded countries

Accounting periods beginning before 9 July 1998

Legislation/Regulatory – SI 1998/3081 Sch. 1

Accounting periods beginning on or after 9 July 1998

Legislation/Regulatory – SI 1998/3081 Sch. 2

Branch or agency income and gains

Legislation/Regulatory – SI 1998/3081 reg. 6, 7

Income and gains requirements

Legislation/Regulatory – SI 1998/3081 reg. 5, 7

Limitation on apportionment

Legislation/Regulatory – SI 1998/3081 reg. 3, 4

List

Legislation/Regulatory – SI 1998/3081

Excluded territories exemption

Basic rule

Legislation/Regulatory – SI 2012/3024 ; TIOPA2010 s. 371KB

Category A income

Legislation/Regulatory – TIOPA2010 s. 371KE

Category B income

Legislation/Regulatory – TIOPA2010 s. 371KG

Category D income

Legislation/Regulatory – TIOPA2010 s. 371KI

Conditions to be met

Commentary – Tax Reporter ¶769-740

Determination of territory of residence

Legislation/Regulatory – SI 2012/3024 ; TIOPA2010 s. 371KC

Four categories of income

Commentary – Tax Reporter ¶769-760

Generally

Legislation/Regulatory – SI 2012/3024 ; TIOPA2010 s. 371KA

Intellectual property condition

Commentary – Tax Reporter ¶769-780

Legislation/Regulatory – TIOPA2010 s. 371KJ

Residence in an excluded territory

Commentary – Tax Reporter ¶769-740

Threshold amount, meaning

Legislation/Regulatory – TIOPA2010 s. 371KD

Exempt activities

Accounting period straddling 1 July 2009

Legislation/Regulatory – FA2009 Sch. 16, para. 14

Anti-avoidance, reference periods

Legislation/Regulatory – FA2009 Sch. 16, para. 19

Banking

Legislation/Regulatory – ICTA88 Sch. 25, para. 11(3)

HMRC Guidance – INTM254890 ; INTM254900 ; INTM254910

Conditions

Legislation/Regulatory – ICTA88 Sch. 25, para. 6(1)

EEA territory

Legislation/Regulatory – ICTA88 Sch. 25, para. 5(1A), 8(5), (6)

HMRC Guidance – INTM254400 ; INTM254820 ; INTM254840 ; INTM254930 ; INTM256020

Exempt holding company, meaning

Legislation/Regulatory – FA2009 Sch. 16, para. 13

Generally

Legislation/Regulatory – FA2000 Sch. 31, para. 9 ; ICTA88 Sch. 25, para. 5-12

HMRC Guidance – INTM254400 ; INTM254820 ; INTM255000 ; INTM255010 ; INTM255050 ; INTM256730

Holding companies

Legislation/Regulatory – FA2009 Sch. 16, para. 12-20 ; ICTA88 Sch. 25, para. 6(3)-(5)

Hong Kong and Macao companies

Legislation/Regulatory – ICTA88 Sch. 25, para. 5(3)-(5)

HMRC Guidance – INTM254400 ; INTM254820

Insurance business

Legislation/Regulatory – ICTA88 Sch. 25, para. 6(2B), 11(6), 11A, 11B

HMRC Guidance – INTM254890 ; INTM254900 ; INTM254910

Local holding companies

Legislation/Regulatory – FA2009 Sch. 16, para. 12-20 ; ICTA88 Sch. 25, para. 6(3)-(5)

Qualifying holding companies

Legislation/Regulatory – FA2009 Sch. 16, para. 15-17

Residence territory

Legislation/Regulatory – ICTA88 Sch. 25, para. 5(2)

HMRC Guidance – INTM254400 ; INTM254820

Trade investments, advances made and securities

Legislation/Regulatory – ICTA88 Sch. 25, para. 11(5)

Trustees' income

Legislation/Regulatory – ICTA88 Sch. 25, para. 6(5C)-(5E)

Ultimate corporate parent, meaning

Legislation/Regulatory – FA2009 Sch. 16, para. 18

Exempt period exemption

Adjustment of profits passing through CFC charge gateway

Legislation/Regulatory – TIOPA2010 s. 371JE

Anti-avoidance provisions

Legislation/Regulatory – TIOPA2010 s. 371JF

Anti-avoidance rule

Commentary – Tax Reporter ¶769-500

Basic rule

Legislation/Regulatory – TIOPA2010 s. 371JB

Chargeable company condition

Commentary – Tax Reporter ¶769-480

Commencement of exempt period

Legislation/Regulatory – TIOPA2010 s. 371JC

Company tax returns, amendment of

Legislation/Regulatory – TIOPA2010 s. 371JG

Example

Commentary – Tax Reporter ¶769-540

Exempt period condition

Commentary – Tax Reporter ¶769-440

Generally

Commentary – Tax Reporter ¶769-420

Legislation/Regulatory – FA2012 Sch. 20, para. 56, 58 ; ICTA88 Sch. 25, para. 15B-15G ; TIOPA2010 s. 371JA

HMRC Guidance – INTM224450

Subsequent period condition

Commentary – Tax Reporter ¶769-460

Transitional rules

Commentary – Tax Reporter ¶769-520

Exemption from tax

Basic rule

Legislation/Regulatory – TIOPA2010 s. 371NB

Corresponding UK tax, determination

Legislation/Regulatory – TIOPA2010 s. 371NE

Designer rate tax provisons, meaning

Legislation/Regulatory – TIOPA2010 s. 371ND

Generally

Legislation/Regulatory – TIOPA2010 s. 371NA

Reduction to local tax amount

Legislation/Regulatory – TIOPA2010 s. 371NC

Exemptions from the rules, limited UK connection

Legislation/Regulatory – ICTA88 Sch. 25, para. 12B-12G

HMRC Guidance – INTM255000 ; INTM255010 ; INTM255050 ; INTM256730

Finance leases

Legislation/Regulatory – TIOPA2010 s. 371VIA

Finance profits

Legislation/Regulatory – FA2013 Sch. 47, para. 7 ; TIOPA2010 s. 371VG

Financial business

Legislation/Regulatory – ICTA88 Sch. 25, para. 11

Foreign branch exemption regime

Commentary – Tax Reporter ¶764-755 ; Tax Reporter ¶764-825

HMRC Guidance – INTM281010

Foreign permanent establishments

– see Foreign permanent establishments

Freedom of establishment

Commentary – Tax Reporter ¶103-940

Gains on disposal of shares

Legislation/Regulatory – ICTA88 Sch. 26, para. 3

HMRC Guidance – INTM256210 ; INTM256220 ; INTM256230 ; INTM256310 ; INTM256320

Generally

Commentary – Schwarz on Tax Treaties ¶10-250 ; Schwarz on Tax Treaties ¶10-700

Gross income, determining

Legislation/Regulatory – ICTA88 Sch. 25, para. 12(4)

HMRC Guidance – INTM255000 ; INTM255010 ; INTM255050 ; INTM256730

Group mismatch schemes

Legislation/Regulatory – CTA2010 s. 938M

Group relief

Commentary – Tax Reporter ¶768-140

Legislation/Regulatory – FA98 Sch. 3, para. 43 ; ICTA88 Sch. 24, para. 5 ; TIOPA2010 s. 371SL

HMRC Guidance – INTM254380 ; INTM255680

Group treasury companies

Accounting periods beginning before, and ending on or after 20 March 2013

Commentary – Tax Reporter ¶768-710

Generally

Commentary – Tax Reporter ¶768-710

Hire purchase

Legislation/Regulatory – TIOPA2010 s. 371VIA

Holding companies

Legislation/Regulatory – FA2000 Sch. 31, para. 9 ; FA2009 Sch. 16, para. 15, 16 ; ICTA88 Sch. 25, para. 6(3), (4ZA), 12, 12A

Identifying

Commentary – Tax Reporter ¶767-100 ; Tax Reporter ¶767-340–Tax Reporter ¶767-460

Incorporated cell companies

Legislation/Regulatory – TIOPA2010 s. 371VE

Insurance business, meaning

Commentary – Tax Reporter ¶767-180

Insurance companies

General insurance business of foreign company accounted for on non-annual basis

Legislation/Regulatory – SI 1999/1408

Generally

Legislation/Regulatory – ICTA88 Sch. 25, para. 6(2B), 11(6), 11A, 11B

Intangible fixed assets

Commentary – Tax Reporter ¶726-100 ; Tax Reporter ¶768-120

Legislation/Regulatory – CTA2009 s. 870 ; TIOPA2010 s. 371SK

Intellectual property, exploitation of

Business establishment

Legislation/Regulatory – ICTA88 Sch. 25, para. 12I

HMRC Guidance – INTM255000 ; INTM255010 ; INTM255050 ; INTM256730

Finance income

Legislation/Regulatory – ICTA88 Sch. 25, para. 12M

HMRC Guidance – INTM255000 ; INTM255010 ; INTM255050 ; INTM256730

Generally

Legislation/Regulatory – ICTA88 Sch. 25, para. 12H-12N

HMRC Guidance – INTM255000 ; INTM255010 ; INTM255050 ; INTM256730

Intellectual property business

Legislation/Regulatory – ICTA88 Sch. 25, para. 12J

HMRC Guidance – INTM255000 ; INTM255010 ; INTM255050 ; INTM256730

Interpretation

Legislation/Regulatory – ICTA88 Sch. 25, para. 12N

Other business activities

Legislation/Regulatory – ICTA88 Sch. 25, para. 12K

HMRC Guidance – INTM255000 ; INTM255010 ; INTM255050 ; INTM256730

UK connection

Legislation/Regulatory – ICTA88 Sch. 25, para. 12L

HMRC Guidance – INTM255000 ; INTM255010 ; INTM255050 ; INTM256730

Interests in companies

Legislation/Regulatory – FA2013 Sch. 47, para. 8 ; TIOPA2010 s. 371VH

Interim improvements

Commentary – Essential Tax Companion ¶39040

Interpretation

Legislation/Regulatory – TIOPA2010 s. 371VA

Investment business

Legislation/Regulatory – ICTA88 Sch. 25, para. 9(1)

HMRC Guidance – INTM254870 ; INTM254890

Leases treated as long funding leases

Legislation/Regulatory – TIOPA2010 s. 371SJ

Leasing plant and machinery, restriction on use of losses

Legislation/Regulatory – CTA2010 s. 398D(6), (6A)

Limited UK connection

Business activities

Legislation/Regulatory – ICTA88 Sch. 25, para. 12D

HMRC Guidance – INTM255000 ; INTM255010 ; INTM255050 ; INTM256730

Business establishment

Legislation/Regulatory – ICTA88 Sch. 25, para. 12C

HMRC Guidance – INTM255000 ; INTM255010 ; INTM255050 ; INTM256730

Finance income

Legislation/Regulatory – ICTA88 Sch. 25, para. 12F

HMRC Guidance – INTM255000 ; INTM255010 ; INTM255050 ; INTM256730

Generally

Legislation/Regulatory – ICTA88 Sch. 25, para. 12B-12G

Gross income

Legislation/Regulatory – ICTA88 Sch. 25, para. 12G

Intellectual property income

Legislation/Regulatory – ICTA88 Sch. 25, para. 12F

UK connection

Legislation/Regulatory – ICTA88 Sch. 25, para. 12E

HMRC Guidance – INTM255000 ; INTM255010 ; INTM255050 ; INTM256730

Loan relationships (qualifying), exemption for profits from

75 per cent exemption

Commentary – Tax Reporter ¶769-150 ; Tax Reporter ¶769-190

Legislation/Regulatory – TIOPA2010 s. 371ID

Basic rule

Legislation/Regulatory – TIOPA2010 s. 371IA

Claims

Commentary – Tax Reporter ¶769-110 ; Tax Reporter ¶769-210

Legislation/Regulatory – TIOPA2010 s. 371IJ

Conditions to be met

Commentary – Tax Reporter ¶769-110

Determination of profits

Commentary – Tax Reporter ¶769-120

Legislation/Regulatory – TIOPA2010 s. 371IF

Exclusions

Commentary – Tax Reporter ¶769-140

Full exemption

Commentary – Tax Reporter ¶769-150–Tax Reporter ¶769-210

Funded out of qualifying resources

Legislation/Regulatory – FA2013 Sch. 47, para. 19 ; TIOPA2010 s. 371IB

Generally

Commentary – Tax Reporter ¶769-070 ; Tax Reporter ¶769-110–Tax Reporter ¶769-210

Limit on credit

Legislation/Regulatory – FA2013 Sch. 47, para. 13, 14 ; TIOPA2010 s. 49A, 112(3A)

Matched interest

Legislation/Regulatory – FA2013 Sch. 47, para. 20 ; TIOPA2010 s. 371IE

Matched interest, exemption for

Commentary – Tax Reporter ¶769-200

Meaning of qualifying loan relationship

Commentary – Tax Reporter ¶769-130

Qualifying loan relationship, meaning

Legislation/Regulatory – TIOPA2010 s. 371IG, 371IH, 371II

Qualifying resources, meaning

Legislation/Regulatory – TIOPA2010 s. 371IB, 371II

Qualifying value of relevant pre-acquisition funds

Legislation/Regulatory – TIOPA2010 s. 371IC

Local holding companies

Legislation/Regulatory – FA2000 Sch. 31, para. 9 ; ICTA88 Sch. 25, para. 6

Local reinsurance contracts

Legislation/Regulatory – ICTA88 Sch. 25, para. 11(7)

HMRC Guidance – INTM254890 ; INTM254900 ; INTM254910

Long funding leases, election for leases to be treated as

Commentary – Tax Reporter ¶768-100

Losses in pre-direction accounting period

Legislation/Regulatory – ICTA88 Sch. 24, para. 9

HMRC Guidance – INTM255630 ; INTM255760 ; INTM255790 ; INTM255800 ; INTM256660

Low profit margin exemption

Anti-avoidance rule

Legislation/Regulatory – TIOPA2010 s. 371MC

Basic rule

Legislation/Regulatory – TIOPA2010 s. 371MB

Generally

Commentary – Tax Reporter ¶769-620

Legislation/Regulatory – TIOPA2010 s. 371MA

HMRC Guidance – INTM225800

Low profits exemption

Accounting profits for the period

Commentary – Tax Reporter ¶769-580

Anti-avoidance provisions

Legislation/Regulatory – TIOPA2010 s. 371LC

Anti-avoidance rules

Commentary – Tax Reporter ¶769-600

Basic rule

Legislation/Regulatory – TIOPA2010 s. 371LB

Generally

Commentary – Tax Reporter ¶769-560

Legislation/Regulatory – TIOPA2010 s. 371LA

Pre-tax profits

Commentary – Tax Reporter ¶769-580

Lower level of taxation

Legislation/Regulatory – F(No. 2)A2005 s. 44(4)-(6) ; FA93 s. 119

Majority interest, meaning

Legislation/Regulatory – ICTA88 Sch. 24, para. 4(3)

Management of charge

Appeals affecting more than one person

Legislation/Regulatory – TIOPA2010 s. 371UE

Application of Taxes Acts

Legislation/Regulatory – TIOPA2010 s. 371UB

Generally

Legislation/Regulatory – TIOPA2010 s. 371UA

Just and reasonable apportionments

Legislation/Regulatory – TIOPA2010 s. 371UC

Recovery of sum charge from other UK resident companies

Legislation/Regulatory – TIOPA2010 s. 371UF

Relief against sum charged

Legislation/Regulatory – TIOPA2010 s. 371UD ; TIOPA2010 s. 371UD(1)-(8)

Maximum reliefs assumed to be claimed

Legislation/Regulatory – ICTA88 Sch. 24, para. 4

Meaning

Commentary – Tax Reporter ¶767-340

Motive test

Case Law – Vodafone 2 v. R & C Commrs (2007) Sp C 622

Non-trading finance profits

Capital investment from the UK

Commentary – Tax Reporter ¶769-010

Conditions to be met for profits to pass through gateway

Commentary – Tax Reporter ¶768-970–Tax Reporter ¶769-030

Dividends to UK resident companies, profits paid in lieu of

Commentary – Tax Reporter ¶769-020

Five per cent rule

Commentary – Tax Reporter ¶768-610 ; Tax Reporter ¶768-630

Generally

Commentary – Tax Reporter ¶768-555–Tax Reporter ¶768-630

Incidental

Commentary – Tax Reporter ¶768-590

Leases to UK resident companies, profits arising

Commentary – Tax Reporter ¶769-030

Meaning

Commentary – Tax Reporter ¶768-570

Profits from UK activities

Commentary – Tax Reporter ¶768-990

Relevant finance lease

Commentary – Tax Reporter ¶768-570

Non-trading finance profits (CFC charge gateway)

Basic rule

Legislation/Regulatory – TIOPA2010 s. 371EA

Capital investment from the UK

Legislation/Regulatory – TIOPA2010 s. 371EC

Dividends and distributions to UK resident companies, arrangements in lieu of

Legislation/Regulatory – TIOPA2010 s. 371ED

Finance leases to UK resident companies

Legislation/Regulatory – FA2013 Sch. 47, para. 4 ; TIOPA2010 s. 371EE

UK activities

Legislation/Regulatory – TIOPA2010 s. 371EB

Non-trading income

Legislation/Regulatory – ICTA88 Sch. 25, para. 12(6)

HMRC Guidance – INTM255000 ; INTM255010 ; INTM255050 ; INTM256730

Non-trading income, meaning

Commentary – Tax Reporter ¶767-180

Offshore funds

Commentary – Tax Reporter ¶767-640 ; Tax Reporter ¶767-660

Legislation/Regulatory – TCGA92 s. 213A

Outstanding capital, meaning

Legislation/Regulatory – ICTA88 Sch. 25, para. 11(4)

Overview

Commentary – Tax Reporter ¶767-010

Overview of new regime

Commentary – Tax Reporter ¶767-100

Pre-1 January 2013

40 per cent test

Commentary – Essential Tax Companion ¶39000

Apportionment of chargeable profits

Commentary – Essential Tax Companion ¶39020

Charge to tax

Commentary – Essential Tax Companion ¶39000

Control, meaning

Commentary – Essential Tax Companion ¶39000

Designer rate regimes

Commentary – Essential Tax Companion ¶39030

Excluded companies

Commentary – Essential Tax Companion ¶39010

Excluded countries list

Commentary – Essential Tax Companion ¶39000 ; Essential Tax Companion ¶39010

Exempt activities test

Commentary – Essential Tax Companion ¶39010

Exempt period test

Commentary – Essential Tax Companion ¶39010

Generally

Commentary – Essential Tax Companion ¶39000

Limited UK connection test

Commentary – Essential Tax Companion ¶39010

Motive test

Commentary – Essential Tax Companion ¶39010

Scope of legislation

Commentary – Essential Tax Companion ¶39000

Small chargeable profits test

Commentary – Essential Tax Companion ¶39010

Small relevant profits test

Commentary – Essential Tax Companion ¶39010

Territory of residence

Commentary – Essential Tax Companion ¶39000

Premises

Legislation/Regulatory – ICTA88 Sch. 25, para. 7(2)

HMRC Guidance – INTM256070

Profits attributable to UK activities

Business premises condition

Commentary – Tax Reporter ¶768-870

Economic value, exclusion

Commentary – Tax Reporter ¶768-810

Exclusion of amounts

Commentary – Tax Reporter ¶768-790–Tax Reporter ¶768-955

Export of goods condition

Commentary – Tax Reporter ¶768-955

Generally

Commentary – Tax Reporter ¶768-530 ; Tax Reporter ¶768-730–Tax Reporter ¶768-955

Income condition

Commentary – Tax Reporter ¶768-890

Intellectual property condition

Commentary – Tax Reporter ¶768-930

Management expenditure condition

Commentary – Tax Reporter ¶768-915

OECD guidance

Commentary – Tax Reporter ¶768-750

Step-by-step approach

Commentary – Tax Reporter ¶768-770

Trading profits, exclusion

Commentary – Tax Reporter ¶768-855–Tax Reporter ¶768-955

UK activities a minority of total activities, exclusion

Commentary – Tax Reporter ¶768-790

Profits attributable to UK activities (CFC charge gateway)

Anti-avoidance (trading profits), exclusion

Legislation/Regulatory – TIOPA2010 s. 371DL

Business premises condition (trading profit), exclusion

Legislation/Regulatory – TIOPA2010 s. 371DG

Economic value, exclusion

Legislation/Regulatory – TIOPA2010 s. 371DD

Exclusions

Legislation/Regulatory – TIOPA2010 s. 371DC-371DL

Export of goods condition (trading profit), exclusion

Legislation/Regulatory – TIOPA2010 s. 371DK

Generally

Legislation/Regulatory – TIOPA2010 s. 371CA, 371DA

Income condition (trading profit), exclusion

Legislation/Regulatory – TIOPA2010 s. 371DH

Independent companies' arrangements, exclusion

Legislation/Regulatory – TIOPA2010 s. 371DE

Intellectual property (trading profit), exclusion

Legislation/Regulatory – TIOPA2010 s. 371DJ

Management expenditure condition (trading profit), exclusion

Legislation/Regulatory – TIOPA2010 s. 371DI

Steps to be taken

Legislation/Regulatory – TIOPA2010 s. 371DB

Trading profit

Legislation/Regulatory – TIOPA2010 s. 371DF-371DL

UK activities a minority of total activities, exclusion

Legislation/Regulatory – TIOPA2010 s. 371DC

Property business profits

Legislation/Regulatory – TIOPA2010 s. 371VI

Purchase of property, costs deductible

Legislation/Regulatory – ICTA88 Sch. 25, para. 11(2)

Qualifying resources

Exceptions

Commentary – Tax Reporter ¶769-170

Reduction in UK tax

Legislation/Regulatory – ICTA88 Sch. 25, para. 16-19

Regulations

Legislation/Regulatory – TIOPA2010 s. 371VJ

Related companies

Legislation/Regulatory – ICTA88 Sch. 25, para. 19(2)

HMRC Guidance – INTM255240 ; INTM255250 ; INTM255280 ; INTM255290 ; INTM255300 ; INTM255310 ; INTM255340 ; INTM255350 ; INTM255360 ; INTM255370 ; INTM255380 ; INTM255390 ; INTM255400 ; INTM255420 ; INTM255500

Related, meaning

Commentary – Tax Reporter ¶767-180

Relevant finance leases

Legislation/Regulatory – TIOPA2010 s. 371VIA

Relevant interest rules

Bare trustee, meaning

Legislation/Regulatory – TIOPA2010 s. 371OB

Generally

Legislation/Regulatory – TIOPA2010 s. 371OA

Indirect and direct interest, meaning

Legislation/Regulatory – TIOPA2010 s. 371OB

Interpretation

Legislation/Regulatory – TIOPA2010 s. 371OB

Relevant interest, meaning

Legislation/Regulatory – TIOPA2010 s. 371OC-371OE

Reliefs

Gains on disposal of shares

Legislation/Regulatory – ICTA88 Sch. 26, para. 3

Group relief

Legislation/Regulatory – ICTA88 Sch. 26, para. 1

Trading losses

Legislation/Regulatory – ICTA88 Sch. 26, para. 1

Residence

Assumed

Legislation/Regulatory – ICTA88 Sch. 24, para. 1, 2

Basic rule

Legislation/Regulatory – TIOPA2010 s. 371TA

Corporation tax assumptions

Commentary – Tax Reporter ¶768-020

Designations

Legislation/Regulatory – TIOPA2010 s. 371TC

Determination of territory

Legislation/Regulatory – TIOPA2010 s. 371TB

Determining

Legislation/Regulatory – ICTA88 Sch. 25, para. 11(9)

HMRC Guidance – INTM254890 ; INTM254900 ; INTM254910

Elections

Legislation/Regulatory – TIOPA2010 s. 371TC

Generally

Commentary – Tax Reporter ¶767-460

Legislation/Regulatory – FA93 s. 119

Territory

Legislation/Regulatory – ICTA88 Sch. 25, para. 5(2) ; TIOPA2010 s. 371TB

Two or more eligible territories

Commentary – Tax Reporter ¶767-460

Self-assessment

Legislation/Regulatory – FA98 Sch. 17, para. 37

Solo consolidation

Commentary – Tax Reporter ¶768-690 ; Tax Reporter ¶769-100

Solo consolidation (CFC charge gateway), basic rule

Legislation/Regulatory – TIOPA2010 s. 371HA

Superior holding companies

Legislation/Regulatory – FA2000 Sch. 31, para. 9 ; ICTA88 Sch. 25, para. 6(4AA)

Surrender of losses

Legislation/Regulatory – CTA2010 s. 105(3A), (3B), (5A) ; FA2013 s. 29

Tax exemption

Calculation of corresponding UK tax

Commentary – Tax Reporter ¶769-700

Designer rate tax provisions

Commentary – Tax Reporter ¶769-720

Determination

Commentary – Tax Reporter ¶769-660

Generally

Commentary – Tax Reporter ¶769-640

Reductions to be made to local tax amount

Commentary – Tax Reporter ¶769-680

Temporary exemption following certain acquisitions and reorganisations

Beginning of exempt period

Legislation/Regulatory – ICTA88 Sch. 25, para. 15B

Disqualifying relevant transactions

Legislation/Regulatory – ICTA88 Sch. 25, para. 15E

Ending of exempt period

Legislation/Regulatory – ICTA88 Sch. 25, para. 15F

Generally

Legislation/Regulatory – ICTA88 Sch. 25, para. 15A-15G

Interpretation

Legislation/Regulatory – ICTA88 Sch. 25, para. 15G

Territories with a lower level of taxation

Legislation/Regulatory – F(No. 2)A2005 s. 44(4)-(6)

Tonnage tax

Legislation/Regulatory – FA2000 Sch. 22, para. 54, 57

HMRC Guidance – TTM01310 ; TTM01320 ; TTM03100 ; TTM03190 ; TTM06470 ; TTM07100 ; TTM07110 ; TTM07120 ; TTM07210 ; TTM07230 ; TTM07240 ; TTM17021 ; TTM17311 ; TTM17326

Tonnage tax companies

Commentary – Tax Reporter ¶792-060

Trade investments, meaning

Legislation/Regulatory – ICTA88 Sch. 25, para. 11(5)

Trading finance profits

An arrangement which would be

Commentary – Tax Reporter ¶768-655

Banking business profits

Commentary – Tax Reporter ¶769-040

Basic rule

Commentary – Tax Reporter ¶769-040

Captive insurance business, profits from

Commentary – Tax Reporter ¶769-090

Free assets, meaning

Commentary – Tax Reporter ¶769-060

Free capital, meaning

Commentary – Tax Reporter ¶769-050

Generally

Commentary – Tax Reporter ¶768-655

Loan relationships

Commentary – Tax Reporter ¶769-070

Loans from foreign permanent establishments of UK companies

Commentary – Tax Reporter ¶769-080

Solo consideration, profits under

Commentary – Tax Reporter ¶769-100

Trading finance profits (CFC charge gateway)

Banking business, exclusion

Legislation/Regulatory – SI 2012/3041 ; TIOPA2010 s. 371FD

Basic rule

Legislation/Regulatory – TIOPA2010 s. 371FA

Insurance business, exclusion

Legislation/Regulatory – TIOPA2010 s. 371FE

Loans from foreign permanent establishments of UK resident companies

Legislation/Regulatory – TIOPA2010 s. 371FC

Qualifying loan relationships

Legislation/Regulatory – TIOPA2010 s. 371FB

Trading income, meaning

Commentary – Tax Reporter ¶767-180

Trading profits, meaning

Commentary – Tax Reporter ¶767-180

Transfer of assets abroad, reduction in amount charged

Legislation/Regulatory – FA2013 Sch. 10, para. 12 ; ITA2007 s. 725

Transfer pricing

Commentary – Tax Reporter ¶773-820

Legislation/Regulatory – TIOPA2010 s. 179

HMRC Guidance – INTM239500 ; INTM255650 ; INTM255650

Transitional provisions

Legislation/Regulatory – FA2012 Sch. 20, para. 56-59

Unincorporated cell companies

Legislation/Regulatory – TIOPA2010 s. 371VE

Unremittable overseas income

Commentary – Tax Reporter ¶768-180

Legislation/Regulatory – ICTA88 Sch. 24, para. 12 ; TIOPA2010 s. 371SN

HMRC Guidance – INTM255820

Wholesale business

Legislation/Regulatory – ICTA88 Sch. 25, para. 11

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