Commentary

D4.812 Controlled foreign companies

Corporate tax
Corporate tax | Commentary

D4.812 Controlled foreign companies

Corporate tax | Commentary

D4.812 Controlled foreign companies

The provisions in this article apply only to companies where an election has not been made for exemption for the profits of a foreign permanent establishment (D4.801). For details of the double tax relief provisions that generally apply equally to companies and individuals see Division E6.4.

When an apportionment of a controlled foreign company's (CFC's) chargeable profits is made, an apportionment of any creditable tax attributable for that period is also made1 and this is taken as a credit against the tax payable under the CFC legislation.

'Creditable tax'2 is the total of:

  1.  

    (a)     the amount of relief from corporation tax (including underlying tax relief) in respect of the CFC's income which would be given to the company under the double taxation relief provisions3 for foreign tax attributable to any income brought into account in determining its chargeable profits under the CFC legislation

  2.  

    (b)     any UK income tax deducted at source which could be offset against the CFC's corporation tax liability4; and

  3.  

    (c)     the amount of UK income and corporation tax actually charged (and not repaid or repayable) in respect of the CFC's chargeable profits for that

To continue reading
View the latest version of this document, as well as thousands of others like it, sign in to TolleyLibrary or register for a free trial