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HMRC internal manual

International Manual

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HM Revenue & Customs
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Controlled Foreign Companies: Introduction to the CFC Charge: Chargeable Companies

The definition of a chargeable company restricts the CFC charge to UK resident companies that fall within the conditions at TIOPA10/S371BD. This section states that a UK resident company will only be a chargeable company to the extent that the total of the following amounts is at least 25% of the chargeable profits of the CFC:

  1. the amount of the chargeable profits which have been apportioned to the UK resident company at step 3 of INTM194400, and
  2. the amount of the chargeable profits which have been apportioned at that step to relevant persons (whether corporate or individual) who are connected or associated with the UK resident company at any time during the accounting period.

TIOPA10/S371BE (see INTM194650) and TIOPA10/S371BF (see INTM194700) exclude a UK resident company that manages or participates in offshore funds from being a chargeable company at step 4 of INTM194400 if it meets certain requirements as set out in the sections.