Controlled foreign companies (CFCs)

Produced by a Tolley Corporation Tax expert
Corporation Tax
Guidance

Controlled foreign companies (CFCs)

Produced by a Tolley Corporation Tax expert
Corporation Tax
Guidance
imgtext

The controlled foreign company (CFC) rules apply to companies that are not tax resident in the UK but which are controlled by UK residents. They also apply to foreign branches in respect of which an exemption election has been made. See the Foreign branch exemption ― overview guidance note for more details.

The CFC rules aim to prevent UK resident companies setting up subsidiaries abroad in order to divert and keep profits outside the UK tax net. Where an overseas company is a CFC, generally speaking, its chargeable profits will be attributed to its UK corporate shareholders so that they are charged to corporation tax on those attributed profits (the CFC charge).

The rules are complex and this guidance note outlines the main provisions only. More detailed commentary can be found in Simon’s Taxes D4.401.

HMRC guidance on the CFC regime is available at INTM190000 onwards.

CFCs ― basic principles

A CFC is any company which is resident outside the UK, but ‘controlled’ by a UK resident person or persons (which can be both companies and

Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+™
Powered by Tolley+

Popular Articles

Outright gifts

Outright giftsAn outright gift is the most straightforward type of gift. It simply involves the outright transfer of property from one person to another with no conditions attached.This type of gift is most suitable for clients who want to pass over modest amounts, or give to responsible and capable

14 Jul 2020 12:22 | Produced by Tolley in association with Emma Haley at Boodle Hatfield LLP Read more Read more

Holdover relief for disposals by trustees

Holdover relief for disposals by trusteesOverviewWhere a capital gain has been realised on an asset that has been disposed of and that disposal was not for full value (that is not in an arm’s length sale) then holdover relief may be available. This will happen when trustees appoint capital assets

14 Jul 2020 11:54 | Produced by Tolley Read more Read more

Terminal trading loss relief

Terminal trading loss reliefTerminal loss relief for trade losses in the final 12 monthsTrading losses incurred by a company in the final 12 months leading up to the discontinuance of trade may be carried back for up to three years from the period beginning immediately before that 12-month period.

14 Jul 2020 13:49 | Produced by Tolley Read more Read more